(Registration Number : 1994/003426/07)
Group annual financial statements
for the year ended 31 March 2015
Tata Africa Holdings (SA)
Proprietary Limited
Contents Page
2
3 - 4
5 - 6
7
8
9
10
11 - 49
Preparer
The annual financial statements have been prepared under the supervision of H Holford, CA(SA),
Financial Manager.
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the group financial statements
Tata Africa Holdings (SA) Proprietary LimitedGroup annual financial statementsfor the year ended 31 March 2015
Directors' responsibility for financial reporting
Independent auditor's report
Directors' report
1
Tata Africa Holdings (SA) Proprietary LimitedDirectors’ reportfor the year ended 31 March 2015
The directors have pleasure in presenting their report for the year ended 31 March 2015.
Business activities
Review of operations
Share capital
Dividends
Directors
The directors in office during the year and at the date of this report are:
D Geeringh
B Muthuraman * (resigned 26 September 2014)
Noel N Tata +
B Pretorius
Dr H S Vachha *
T Mbele (resigned 28 February 2015)
X Gobille #
* Indian
+ Irish
# French
The activities of the company and its subsidiaries include the holding of investments, the import and export of general
commodities, trade in steel and related products, the providing of consulting services and the assembly and distribution
of buses and trucks.
The group annual financial statements set out on pages 3 to 49 adequately reflect the state of affairs and the results of
the business operations of the company for the year ended 31 March 2015.
The directors have proposed and the shareholders have approved an interim dividend of R43 822 732 (2014: R65 004
712) to be paid after the financial year end, subject to the directors resolution that the Company shall immediately after
the payment of the interim dividend, satisfy the solvency and liquidity test as prescribed under the Companies Act,
2008.
A dividend of R65 004 712 (2014 - R10 460 528) was paid during the year.
Subsidiaries, associates and joint ventures
Refer to note 6 for details of the subsidiaries, associates and joint ventures.
The company issued 9 556 425 ordinary no par value shares on 15 September 2014, pursuant to conversion of
debentures.
The attributable interest of the company in the aggregate net income after taxation for the year of its subsidiaries
amounts to R249 919 638 (2014: R162 913 555) profit and R168 681 710 (2014: R94 559 571) loss.
3
Tata Africa Holdings (SA) Proprietary Limited
Secretary
Business Address Postal Address
KPMG Services (Proprietary) Limited Private Bag 9
85 Empire Road, Parktown, 2193 Parkview, 2122
Auditors
Deloitte & Touche are the appointed auditors for the company.
Business Address Postal Address
Deloitte & Touche Private Bag X6
The Woodlands Gallo Manor
20 Woodlands Drive 2052
Woodmead
Postal address
P.O. Box 55738
Northlands
2116
2196
Johannesburg, South Africa
Directors’ report for the year ended 31 March 2015 (continued)
During the year, a shareholder, Tata International Singapore Pte Limited, has injected funds into Tata Africa Holdings
(Kenya) Limited, Tata Africa Holdings (Ghana) Limited, and TAH Pharmaceuticals Limited. These funds would be
converted into equity subsequent to year end and will result in these companies becoming subsidiaries/associates of
Tata International Singapore Pte Limited. There have been no other material circumstances or events between the year
end and the date of this report.
Holding company
Going concern
Subsequent events
The holding company is Tata International Limited, incorporated in India which holds 88.2% (2014: 99.5%) of the
Company’s ordinary shares. The ultimate holding company is Tata Sons Limited.
The directors of Tata Africa Holdings (SA) Proprietary Limited have reviewed the going concern considerations of the
company and its subsidiaries and associates and have no reason to believe the business will not be a going concern in
the year ahead.
A secretary has not been appointed. KPMG Services (Proprietary) Limited performs certain secretarial duties on
behalf of the company.
Cnr. Rivonia and Ferguson Road
Business address
39 Ferguson Road
Illovo
Company details
4
Tata Africa Holdings (SA) Proprietary Limited
Note
2015 2014 2015 2014
R R R R
Assets
Non-current assets
Property, plant and equipment 4 413 904 989 339 365 149 40 677 483 41 941 451
Intangible assets 5 201 148 436 196 408 343 - -
Interest in associates and joint ventures 6.1 103 666 291 130 776 582 174 898 012 174 868 103
Investment in subsidiaries 6.8 - - 174 482 816 174 468 082
Other investments 7 57 000 000 160 663 464 57 000 000 160 659 826
Prepaid operating lease premiums 8 60 465 059 36 231 983 - -
Amounts owing by related parties 9 - - 28 694 783 80 106 566
Deferred tax asset 10 52 907 331 38 826 979 943 168 676 621
Total non-current assets 889 092 106 902 272 500 476 696 262 632 720 649
Current assets
Assets classified as held-for-sale 11 - 374 728 283 - -
Amounts owing by related parties 9 630 832 543 62 042 947 699 211 209 70 828 260
Inventories 12 1 367 700 463 1 368 050 511 5 528 250 6 377 351
Trade receivables 13 1 052 745 128 1 084 822 429 - -
Other receivables 14 106 623 617 88 733 825 1 230 204 439 596
Taxation 31 19 836 179 - 372 386 -
Cash and cash equivalents 224 466 874 139 689 847 11 366 980 26 963 388
Total current assets 3 402 204 804 3 118 067 842 717 709 029 104 608 595
Total assets 4 291 296 910 4 020 340 342 1 194 405 291 737 329 244
Equity and liabilities
Equity
Share capital 15 84 274 485 74 718 060 84 274 485 74 718 060
Retained earnings 651 876 694 708 919 374 251 883 556 258 861 770
Long-term convertible equity instrument 16 64 863 240 74 419 665 64 863 240 74 419 665
Translation reserve (118 009 251) (58 897 240) - -
Total equity attributable to parent 683 005 168 799 159 859 401 021 281 407 999 495
Non-controlling interest 16 569 494 14 519 260 - -
Total equity 699 574 662 813 679 119 401 021 281 407 999 495
Liabilities
Non-current liabilities
Amounts owing to related parties 9 382 725 000 333 147 150 20 885 376 42 421 556
Deferred employee liabilities 17 2 832 818 4 228 080 - -
Long-term liabilities 18 173 476 017 156 587 666 140 000 000 155 000 000
Long-term convertible equity instrument 16 9 517 631 13 948 285 9 517 631 13 948 285
Trade and other payables 20 12 992 311 14 815 591 - -
Deferred tax liability 10 10 420 485 10 333 370 - -
Total non-current liabilities 591 964 262 533 060 142 170 403 007 211 369 841
Current liabilities
Amounts owing to related parties 9 1 223 650 946 762 341 789 517 598 573 28 498 109
Short-term liabilities 19 759 756 804 1 044 164 915 5 319 334 17 370 855
Dividend payable 43 822 732 65 004 712 43 822 732 65 004 712
Trade and other payables 20 578 118 553 446 255 528 36 391 265 7 086 232
Taxation 31 4 727 496 18 531 602 - -
Bank overdraft 21 389 681 455 337 302 535 19 849 099 -
Total current liabilities 2 999 757 986 2 673 601 081 622 981 003 117 959 908
Total liabilities 3 591 722 248 3 206 661 223 793 384 010 329 329 749
Total equity and liabilities 4 291 296 910 4 020 340 342 1 194 405 291 737 329 244
Statement of financial positionat 31 March 2015
Group Company
7
Tata Africa Holdings (SA) Proprietary Limited
Note 2015 2014 2015 2014
R R R R
Revenue 22 4 436 848 193 4 529 256 082 91 259 008 254 601 149
Cost of sales (3 525 865 906) (3 705 223 093) (70 483 290) (229 917 383)
Gross profit 910 982 287 824 032 989 20 775 718 24 683 766
Other operating income 48 779 486 38 926 941 36 931 695 88 818 598
Selling, distribution and administrative expenses (698 906 231) (628 374 075) (67 746 180) (70 290 415)
Profit/(loss) from operations 23 260 855 542 234 585 855 (10 038 767) 43 211 949
Profit on sale of investment 163 995 929 - 192 763 224 -
Provision for impairment of investment (103 659 827) (117 321 093) -
Impairment of investment - - - (10 049)
Finance income 24 41 648 091 18 109 557 32 344 651 9 320 665
Finance expense 24 (329 575 669) (194 123 511) (61 170 044) (19 937 853)
Net finance expense (287 927 578) (176 013 954) (28 825 393) (10 617 188)
Profit before taxation 33 264 066 58 571 901 36 577 971 32 584 712
Income tax 25 (53 129 735) (50 720 642) 266 547 259 472
(Loss)/profit after tax (19 865 669) 7 851 259 36 844 518 32 844 184
Equity profit/(loss) from associates and joint ventures 6 3 093 772 (1 558 151) - -
(Loss)/profit for the year (16 771 897) 6 293 108 36 844 518 32 844 184
Other comprehensive income 4 263 948 1 595 017 - -
Total comprehensive (loss)/income for the year (12 507 949) 7 888 125 36 844 518 32 844 184
Total (loss)/profit for the year
is attributed to:
Equity holders of the company (17 483 896) 11 674 243 36 844 518 32 844 184
Non-controlling interest 711 999 (5 381 135) - -
(16 771 897) 6 293 108 36 844 518 32 844 184
Statement of comprehensive incomefor the year ended 31 March 2015
Group Company
8
Tata Africa Holdings (SA) Proprietary LimitedStatement of changes in equity
R R R R R R
Group
Balance at 1 April 2013 74 718 060 771 115 354 - (69 675 488) 16 737 394 792 895 320
Long term convertible equity instrument - - 74 419 665 - - 74 419 665
Profit for the year - 11 674 243 - - (5 381 135) 6 293 108
Other comprehensive income for the year - 1 595 017 - (1 595 017) - -
Dividend paid for the financial year 2012-13 - (10 460 528) - - - (10 460 528)
Interim dividend for the financial year 2013-14 - (65 004 712) - - - (65 004 712)
Change in foreign currency translation reserve - - - 12 373 265 3 163 001 15 536 266
Balance at 31 March 2014 74 718 060 708 919 374 74 419 665 (58 897 240) 14 519 260 813 679 119
Long term convertible equity instrument conversion
during the year 9 556 425 - (9 556 425) - - -
Total comprehensive income for the year - (17 483 896) - - 711 999 (16 771 897)
Other comprehensive income for the year - 4 263 948 - (4 263 948) - -
Interim dividend for the financial year 2014-15 - (43 822 732) - - - (43 822 732)
Change in foreign currency translation reserve - - - (54 848 063) 1 338 235 (53 509 828)
Balance at 31 March 2015 84 274 485 651 876 694 64 863 240 (118 009 251) 16 569 494 699 574 662
Company
Balance at 1 April 2013 74 718 060 301 482 826 - - - 376 200 886
Long term convertible equity instrument - - 74 419 665 - - 74 419 665
Total comprehensive income for the year - 32 844 184 - - - 32 844 184
Dividend paid for the financial year 2012-13 - (10 460 528) - - - (10 460 528)
Interim dividend for the financial year 2013-14 - (65 004 712) - - - (65 004 712)-
Balance at 31 March 2014 74 718 060 258 861 770 74 419 665 - - 407 999 495
Long term convertible equity instrument conversion
during the year 9 556 425 - (9 556 425) - - -
Total comprehensive income for the year - 36 844 518 - - - 36 844 518
Interim dividend for the financial year 2014-15 - (43 822 732) - - - (43 822 732)-
Balance at 31 March 2015 84 274 485 251 883 556 64 863 240 - - 401 021 281
Total
for the year ended 31 March 2015
Retained
earnings
Long term
convertible
equity
instrumentShare capital
Translation
reserve
Non-
controlling
interest
9
Tata Africa Holdings (SA) Proprietary LimitedStatement of cash flowsfor the year ended 31 March 2015
Note 2015 2014 2015 2014
R R R R
Cash flows from operating activities
Cash generated/(utilised) from operations 31 457 337 930 (518 972 026) (169 703 529) (19 279 134)
Interest received 10 250 864 4 498 102 3 274 896 2 257 453
Interest paid (121 176 335) (101 139 934) (14 892 805) (14 787 424)
Taxation paid 31 (89 826 889) (78 690 197) ( 372 386) -
Withholding tax paid 31 (3 381 210) (3 482 899) - -
Dividends received 1 417 966 22 180 000 35 221 268 51 239 376
Dividends paid 31 (65 004 712) (10 460 528) (65 004 712) (10 460 528)
Net cash inflow/(outflow) from operating activities 189 617 614 (686 067 482) (211 477 268) 8 969 743
Cash flows from investing activities
Acquisition of property, plant and equipment (125 327 387) (54 306 412) (1 452 852) ( 232 660)
Acquisition of intangible assets (8 116 061) (2 435 084) - -
Acquisition of interest in subsidiaries - - (13 676 000) (7 236 130)
Acquisition of interest in associates and joint ventures (5 581 200) (139 845 369) (5 629 909) (25 000 000)
Proceeds from disposal of property, plant and equipment 3 814 827 57 463 725 33 870 55 586 428
Proceeds from disposal of investments 109 172 251 - 109 172 251 -
Increase in prepaid operating lease premiums (27 296 368) - - -
Net cash inflow/(outflow) from investing activities (53 333 938) (139 123 140) 88 447 360 23 117 638
Cash flows from financing activities
Long term convertible equity instrument issued - 88 367 950 - 88 367 950
Long term convertible equity instrument repayments (4 430 654) - (4 430 654) -
Increase in amounts owing to related parties - 333 147 150 - -
Amounts paid - defined benefit obligation (4 280 341) (1 612 299) - -
Long-term liabilities repaid - net (247 341 583) (78 991 066) (15 000 000) (30 535 462)
(Decrease)/increase in short-term liabilities (27 341 428) 70 273 516 (12 051 521) (36 024 204)
Decrease/(increase) in non-current amount owing by related
parties 49 577 850 - 51 411 782 (11 028 243)
Increase/(decrease) in current amount owing to related parties
129 930 587 333 147 150 67 654 794 (22 364 022)
Net cash (outflow)/inflow from financing activities(103 885 569) 744 332 401 87 584 401 (11 583 981)
Net increase/(decrease) in cash and cash equivalents 32 398 107 (80 858 221) (35 445 507) 20 503 400
Cash and cash equivalents at beginning of year (197 612 688) (116 754 467) 26 963 388 6 459 988
Cash and cash equivalents at end of year 31 (165 214 581) (197 612 688) (8 482 119) 26 963 388
Group Company
10
Tata Africa Holdings (SA) Proprietary Limited
1.
2.
(a)
(b)
(c)
(d)
Previous year figures have been reclassified, wherever necessary, to make them comparable with those of the
current year.
Comparatives
The financial statements have been prepared on a going concern basis in accordance with International
Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting
Standards Board (IASB) and the Companies Act of South Africa.
Basis of measurement
The financial statements are presented in Rands, which is the group and company’s functional currency. They
are prepared on the historical cost basis except for derivative financial instruments which are measured at fair
value.
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period 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 expected future cash
flows for each of the assets. Expected future cash flows used to determine the value in use are inherently
uncertain and could materially change over time. They are significantly affected by a number of factors
including, sales estimates, together with economic factors such as spot and future prices, discount rates, foreign
currency exchange rates, estimates of costs and future capital expenditure.
Use of estimates and judgements
Reporting entity
Basis of preparation
Statement of compliance
Notes to the group financial statementsfor the year ended 31 March 2015
Tata Africa Holdings SA (Proprietary) Limited is a company domiciled in South Africa.
11
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(a)
(i) Subsidiaries
(ii)
In assessing control, potential voting rights that presently are exercisable or convertible are taken into account.
Investments are stated at cost less impairment losses. The financial statements of subsidiaries are included in the group
annual financial statements from the date that control commences until the date that control ceases.
Associates and joint ventures
The accounting policies set out below have been applied consistently by the group and company to all periods presented
in these consolidated financial statements.
Significant accounting policies
Basis of consolidation
Subsidiaries are entities controlled by the company. Control exists when the company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Investments
are stated at cost less impairment losses.
An associate is an entity over which the group has significant influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies. Investment in associates are stated at cost less impairment
losses at a company level.
A joint venture is an entity over which the company exercises joint control and that is neither a subsidiary or associate.
Investments in joint ventures are stated at cost less impairment losses at a company level.
Any excess of the cost of acquisition over the group's share of the net fair value of the identifiable assets, liabilities and
contingent liabilities of an associate and joint venture are recognised at the date of acquisition is recognised as goodwill
which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of
the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised
immediately in profit or loss.
The requirements of IAS 36, Impairment of Assets, are applied to determine whether it is necessary to recognise any
impairment loss with respect to the group's investment in an associate and joint venture. When necessary, the entire
carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36, Impairment
of Assets, as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell)
with its carrying amount. Any reversal of that impairment loss is recognised in accordance with IAS 36, Impairment of
Assets, to the extent that the recoverable amount of the investment subsequently increases. When a group entity transacts
with its associate, profits and losses resulting from the transactions with the associate are recognised in the group's annual
financial statements only to the extent of interests in the associate and joint venture that are not related to the group.
The results and assets and liabilities of associates and joint ventures are incorporated in these group annual financial
statements using the equity method of accounting, except when the investment is classified as held for sale, in which case
it is accounted for in accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. Under the
equity method, investments in associates and joint ventures are carried in the consolidated statement of financial position
at cost as adjusted for post-acquisition changes in the Group's share of the net assets of the associate, less any impairment
in the value of individual investments. Additional losses are recognised only to the extent that the group has incurred
legal or constructive obligations or made payments on behalf of the associate and joint venture.
12
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(b)
(c)
(i)
(ii)
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial
recognition non-derivative financial instruments are measured as described below.
Economic hedges
Non-derivative financial instruments
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are
translated at the foreign exchange rate ruling at that date. Gains and losses arising on translation are credited to or
charged against income.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when
incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted
for as described below. The fair value of forward exchange contracts is their quoted market price at the statement of
financial position date, being the present value of the quoted forward price.
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and
borrowings, and trade and other payables.
Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities
denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in profit or loss as
part of foreign currency gains and losses.
Significant accounting policies (continued)
The accounting policies set out below have been applied consistently by the group and company to all periods
presented in these consolidated financial statements.
Foreign currency transactions
Financial instruments
The company uses derivative financial instruments to hedge its exposure to foreign exchange risks arising from
operational, financing and investment activities. In accordance with its treasury policy, the company does not hold or
issue derivative financial instruments for trading purposes.
Derivative financial instruments
Foreign exchange differences arising on translation are recognised in the statement of comprehensive income. Non-
monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies
that are stated at fair value are translated to rand at foreign exchange rates ruling at the dates the fair value was
determined.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
are translated to rand at exchange rates at the reporting date. The income and expenses of foreign operations, are
translated to rand at exchange rates at the dates of the transactions. Foreign currency differences are recognised
directly in equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign
currency translation reserve is transferred to the statement of comprehensive income.
13
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(c)
(ii)
Cash and cash equivalents comprise cash balances and call deposits.
Investments at fair value through profit or loss
Other
(d)
(i)
(ii)
The group and company recognises in the carrying amount of an item of property, plant and equipment the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied
with the item will flow to the group and company and the cost of the item can be measured reliably. All other costs
are recognised in the statement of comprehensive income as an expense as incurred.
Subsequent costs
Significant accounting policies (continued)
Financial instruments (continued)
Non-derivative financial instruments (continued)
Owned assets
Items of property, plant and equipment are stated at cost less accumulated depreciation (see accounting policy c (iii))
and impairment losses (see accounting policy g). Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of property, plant and equipment.
A financial instrument is recognised if the company becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the company’s contractual rights to cash flows from the financial assets expire or
if the company transfers the financial asset to another party without retaining control or substantially all risks and
rewards of the asset. Financial liabilities are derecognised if the company’s obligations specified in the contract expire
or are discharged or cancelled.
Trade receivables are recognised and carried at the fair value of the original invoice using the effective interest rate
method. Gains or losses are recognised in the statement of comprehensive income when the receivables are
derecognised or impaired.
An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon
initial recognition. Financial instruments are designated at fair value through profit or loss if the group and company
manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition,
attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through
profit or loss are measured at fair value, and changes therein are recognised in profit or loss.
Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any
impairment losses.
Property, plant and equipment
14
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(d)
(iii)
The following rates of depreciation are used:
Freehold residential land -
Commercial land and buildings 5%
Residential buildings 5%
Motor vehicles 20-30%
Furniture & fittings 17-20%
Plant and Equipment 20-25%
Office equipment 20-33%
Computer equipment 20-33%
Leasehold improvements Lease period
Internally-generated intangible assets - research and development expenditure
Depreciation
Significant accounting policies (continued)
Property, plant and equipment (continued)
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful
lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful
lives that are acquired separately are carried at cost less accumulated impairment losses.
Depreciation rate %
Intangible assets
Depreciation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful
lives of each part of an item of property, plant and equipment. Land is not depreciated.
Depreciation methods, useful lives and residual values, if not insignificant, are reassessed annually.
· the ability to measure reliably the expenditure attributable to the intangible asset during its
development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal
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;
asset; and
or sale;
· how the intangible asset will generate probable future economic benefits;
· the availability of adequate technical, financial and other resources to complete the development and to use or
15
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(d)
Intangible assets acquired in a business combination
Derecognition of intangible assets
(e)
(f)
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is
incurred.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand
and form an integral part of the group and company's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
Inventories
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net
disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
Significant accounting policies (continued)
Property, plant and equipment (continued)
Intangible assets (continued)
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Inventories are stated at the lower of cost and net realisable value. The cost of inventories comprises all costs of
purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses. Inventories are valued on a weighted average basis except for vehicles which are valued on the
specific identification basis. Obsolete, redundant and slow moving inventories are identified on a regular basis and are
written down to their estimated net realisable value.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised
at their fair value at the acquisition date (which is regarded as their cost).
Cash and cash equivalents
16
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(g)
(i)
(ii)
(h)
(i)
(i)
(ii)
Significant accounting policies (continued)
Revenue
Goods sold and services rendered
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns
and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.
Impairment
The carrying amounts of the group and company's assets are reviewed at each statement of financial position date to
determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount
is estimated (see accounting policy g (i)). An impairment loss is recognised whenever the carrying amount of an asset
or its cash generating unit exceeds its recoverable amount. A cash generating unit is the smallest identifiable asset
group that generates cash flows that are largely independent from other assets and groups. Impairment losses are
recognised in the statement of comprehensive income. Impairment losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and
then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
Calculation of recoverable amount
The recoverable amount of assets or cash generating unit is the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For
an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.
Reversal of impairment
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is 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 exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Any impairment previously recorded against goodwill is not
reversed.
No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated
costs or the possible return of goods or continuing management involvement with the goods.
Revenue from services rendered is recognised in profit and loss in proportion to the stage of completion of the
transaction at the reporting date.
Rental income
Rental income from investment property is recognised in the statement of comprehensive income on a straight line
basis over the term of the lease.
Goods sold and services rendered (continued)
17
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(h)
(iii) Other
(i)
(i)
(ii)
(j)
(k)
Significant accounting policies (continued)
Revenue (continued)
Net financing costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method,
interest receivable on funds invested, and foreign exchange gains and losses. Interest income is recognised in the
statement of comprehensive income as it accrues, using the effective interest method.
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the
statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax
rates enacted or substantially enacted at the statement of financial position date, and any adjustment to tax payable in
respect of previous years.
Dividend income is recognised in the statement of comprehensive income on the date the entity's right to receive
payments is established.
Operating lease payments
Payments made under operating leases are recognised in the statement of comprehensive income on a straight line
basis over the term of the lease.
Expenses
Taxation
Employee benefits
The cost of all short term employee benefits is recognised during the period in which the employee renders the related
service.
Deferred tax is provided using the statement of financial position liability method, providing for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax
purposes, the initial recognition of assets or liabilities that affect neither accounting or taxable profit, and differences
relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A
deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an employee benefit expense in the statement of
comprehensive income when they are due.
18
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(l)
(m)
(i)
(ii)
(iii)
Deferred taxation asset is recognised to the extent that it is probable that taxable profits will be available in future
against which the deferred taxation assets can be utilised. The future availability of taxable profits is based on
management’s judgements regarding future business plans.
Property, plant 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 on management’s judgement of
relevant factors and conditions.
Significant accounting policies (continued)
Deferred taxation asset
Provisions
A provision is recognised if, as a result of a past event, the group or company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the expected future statement of cash flows at a pre-
tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Key source of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
Directors' valuation - valuation by directors, utilising appropriate valuation methodology and principles.
Asset lives and residual values
Valuation of investments
Investments in subsidiaries, associates, joint ventures and other investments are valued by management based on
their considered view of the appropriate valuation methodology and valuation assumptions and factors as relevant to
the nature of each investment. In broad principle, management adopts the following criteria in assessing the
valuation methodology to be undertaken:
19
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
3.
(n)
IAS 1 Presentation of Financial Statements Amendment
IAS 16 Property, Plant and Equipment Amendment
IAS 19 Employee Benefits Amendment
IAS 27 Amendment
IAS 28 Investments in Associates and Joint Ventures Amendment
IAS 34 Interim Financial Reporting Amendment
IAS 38 Intangible Assets Amendment
IFRS 5 Amendment
IFRS 7 Financial Instruments: Disclosures Amendment
IFRS 9 Financial Instruments New
IFRS 10 Consolidated Financial Statements Amendment
IFRS 11 Joint Arrangements Amendment
IFRS 12 Disclosure of Interest in Other Entities Amendment
IFRS 14 Regulatory Deferral Accounts New
IFRS 15 Revenue from Contracts with Customers New
1 January 2016
1 January 2016
1 January 2016
Significant accounting policies (continued)
Standard/Interpretation
Annual accounting
period beginning on
or after
New standards and interpretations not yet adopted
At the date of authorisation of the financial statements of the company for the year ended 31 March 2015, the
following Standards and Interpretations were in issue but not yet effective:
The directors have not yet assessed the impact of the above standards and interpretations on the financial statements
of the company within the period of initial application.
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2015
1 January 2018
1 January 2016
1 January 2016
1 January 2016
1 January 2016
Non-current Assets Held for Sale and Discontinued
Operations
1 January 2017
Separate Financial Statements (as amended in 2011)
20
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014
4. Property, plant and equipment CostAccumulated
depreciation
Carrying
amountCost
Accumulated
depreciation
Carrying
amount
R R R R R R
Group
Leasehold improvements 859 616 361 297 498 319 801 772 399 461 402 311
Commercial land and buildings 384 667 239 66 828 145 317 839 094 309 865 891 57 922 487 251 943 404
Plant and equipment 83 613 017 64 306 587 19 306 430 33 825 063 23 390 022 10 435 041
Motor vehicles 54 715 504 33 385 025 21 330 479 54 658 657 32 059 208 22 599 449
Furniture and fittings 48 898 777 32 936 791 15 961 986 117 423 515 79 559 915 37 863 600
Office equipment 29 297 898 21 842 466 7 455 432 25 485 140 17 849 279 7 635 861
Computer equipment 10 301 346 7 575 303 2 726 043 - - -
Capital work in progress 28 787 206 - 28 787 206 8 485 483 - 8 485 483
Total assets 641 140 603 227 235 614 413 904 989 550 545 521 211 180 372 339 365 149
Company
Leasehold improvements 859 616 361 296 498 320 647 032 244 721 402 311
Commercial land and buildings 54 645 376 16 079 270 38 566 106 54 645 376 13 919 414 40 725 962
Motor vehicles 1 582 974 913 799 669 175 1 123 482 1 096 712 26 770
Furniture and fittings 3 438 791 2 969 102 469 689 3 349 709 2 789 732 559 977
Office equipment 2 856 423 2 382 230 474 193 2 425 956 2 199 525 226 431
Total assets 63 383 180 22 705 697 40 677 483 62 191 555 20 250 104 41 941 451
The Company's land and buildings comprise the following:
A listing of Group's land and buildings are contained in a register held at the registered office.
Refer to note 18 and 21 for details of properties offered as security.
– Freehold industrial land and buildings, being portion 1 of Erf 11, Rosslyn.
– Freehold industrial land and buildings, being portion 4 of Erf 5214 Benoni South
Erf 57, Activia Park, Extension 1, Elandsfontein, and Portion 1 of Erf 11, Rosslyn with a combined cost of R 20 260 556 have been offered as
security for a loan from State Bank of India.
– Freehold industrial land and office and warehouse buildings, being portion of Erf 57, Activia Park, Extension 1, Elandsfontein.
21
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
4.
R R R R R R R
Group
Leasehold improvements 402 311 212 585 - ( 116 577) - - 498 319
Commercial land and buildings 251 943 404 82 997 666 1 088 235 (12 528 735) (5 661 476) - 317 839 094
Plant and equipment 10 435 041 2 296 953 13 624 583 (5 516 109) (1 533 680) (358) 19 306 430
Motor vehicles 22 599 449 12 505 075 ( 247 243) (8 450 149) ( 423 078) (4 653 575) 21 330 479
Furniture and fittings 37 863 600 2 305 221 (17 783 401) (4 884 539) (1 486 737) ( 52 158) 15 961 986
Office equipment 7 635 861 2 702 341 1 102 628 (3 599 019) ( 381 158) ( 5 221) 7 455 432
Computer equipment - 545 802 3 164 791 ( 996 130) 16 275 ( 4 695) 2 726 043
Capital work in progress 8 485 483 21 761 744 ( 949 593) - ( 510 428) - 28 787 206
339 365 149 125 327 387 - (36 091 258) (9 980 282) (4 716 007) 413 904 989
2014
Leasehold improvements 493 608 14 590 - ( 105 887) - - 402 311
Commercial land and buildings 243 603 933 8 777 330 25 536 946 (12 778 925) 12 660 497 (25 856 377) 251 943 404
Residential land and buildings 1 271 149 - - ( 88 273) - (1 182 876) -
Plant and equipment 8 374 164 4 248 449 1 682 822 (4 378 461) 517 439 ( 9 372) 10 435 041
Motor vehicles 19 632 617 13 363 987 - (9 404 496) 907 264 (1 899 923) 22 599 449
Furniture and fittings 29 225 712 5 411 517 12 655 376 (8 623 132) ( 648 053) ( 157 820) 37 863 600
Office equipment 6 735 562 4 115 804 102 539 (3 840 880) 552 017 ( 29 181) 7 635 861
Capital work in progress 28 442 356 18 374 735 (39 977 683) ( 158 962) 1 805 037 - 8 485 483
337 779 101 54 306 412 - (39 379 016) 15 794 201 (29 135 549) 339 365 149
Company
Leasehold improvements 402 311 212 584 - ( 116 575) - - 498 320
Commercial land and buildings 40 725 962 - - (2 159 856) - - 38 566 106
Motor vehicles 26 770 710 000 - ( 67 595) - - 669 175
Furniture and fittings 559 977 89 081 - ( 179 369) - - 469 689
Office equipment 226 431 441 187 - ( 190 055) - ( 3 370) 474 193
41 941 451 1 452 852 - (2 713 450) - ( 3 370) 40 677 483
2014
Leasehold improvements 493 608 14 589 - ( 105 886) - - 402 311
Commercial land and buildings 69 451 247 - - (2 868 908) - (25 856 377) 40 725 962
Residential land and buildings 1 271 149 - - ( 88 273) - (1 182 876) -
Motor vehicles 829 362 - - ( 141 762) - ( 660 830) 26 770
Furniture and fittings 751 268 101 795 - ( 227 867) - ( 65 219) 559 977
Office equipment 374 318 116 276 - ( 253 531) - ( 10 632) 226 431
73 170 952 232 660 - (3 686 227) - (27 775 934) 41 941 451
Net disposals
Property, plant and equipment (continued)
2015
Carrying
amount at
beginning of
year
AdditionsDepreciation/
Impairment
Carrying
amount at end
of year
TransfersTranslation
reserve
2015
22
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
5.
R R R R R R
2015
Exploration rights 195 767 782 7 549 380 (1 814 240) - ( 390 768) 201 112 154
Computer software 640 561 566 681 (1 077 838) - ( 93 122) 36 282
196 408 343 8 116 061 (2 892 078) - ( 483 890) 201 148 436
2014
Exploration rights 205 883 067 959 916 ( 745 200) (11 493 781) 1 163 780 195 767 782
Computer software 39 099 1 475 168 ( 772 535) - ( 101 171) 640 561
205 922 166 2 435 084 (1 517 735) (11 493 781) 1 062 609 196 408 343
In prior years the group acquired exploration rights to mining activities in Madagascar through its subsidiary Mpumalanga Mining
Resources SA for an amount of ZAR 191.79 million (USD 28.5 million). The directors have performed a purchase price allocation in
which the fair value of the acquisition is attributed to the exploration rights in its entirety. At the reporting date, the project is still in
the process of exploration. Pursuant to the four conditions of paragraph 20 of IFRS 6, Exploration for and Evaluation of Mineral
Resources, the directors are of the opinion that the investment should not be assessed for impairment since (1) the right to explore has
not expired; (2) the group had planned and therefore invested a further ZAR13 676 000 (USD 1 250 000) in the project during the
year; (3) the project has not yet been developed and is still in the stage of exploration; and (4) no decision has been taken to discontinue
with the exploration and evaluation of mineral resources. Therefore, the investment is stated at cost in the financial statements.
Carrying
amount at end
of year
Intangible assets Carrying
amount at
beginning of
year
Additions Amortisation ImpairmentTranslation
reserve
23
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6.
2015 2014 2015 2014
R R R R
6.1 Interest in associates and joint ventures comprises:
Shares at cost less provision for impairment 156 366 012 156 336 103 156 366 012 156 336 103
Equity loss of associates (71 780 985) (44 689 496) - -
Balance at 1 April (44 689 496) (20 951 345) - -
Dividend received (1 417 966) (22 180 000) - -
Share of profit on investment sold (28 767 295) - - -
Current equity profit/ (loss) from associates 3 093 772 (1 558 151) - -
84 585 026 111 646 607 156 366 012 156 336 103
Loans to associates and joint ventures 19 081 265 19 129 975 18 532 000 18 532 000
103 666 291 130 776 582 174 898 012 174 868 103
The carrying value of the interest in associates and joint ventures is made up from the following companies:
103 666 292 130 776 582
Consilience Technologies Proprietary Limited * 30 077 267 20 198 264
Accordian Investments Proprietary Limited ^ - -
IHMS Hotels (South Africa) Proprietary Limited * - -
TCS Africa Proprietary Limited ^ - 34 367 295
Newshelf 919 Proprietary Limited ^ 56 024 778 59 354 664
Tata Motors (SA) Proprietary Limited ^ 17 564 247 16 856 359
* Joint Ventures
^ Associates
Investments in associates, joint ventures and subsidiaries
Group Company
The associates and joint ventures are all incorporated in South Africa. The share of associates' profit/(loss) is calculated based on
the latest available financial statements and/or management accounts at 31 March 2015 except for Consilience Technologies
Proprietary Limited which is based on information at 31 December 2014.
During the year the Company sold its investment in TCS Africa Proprietary Limited to Tata Consultancy Services Limited, India.
24
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.2 Consilience Technologies Proprietary Limited *
Shares at cost 2 500 000 2 500 000
Provision for impairment (2 500 000) (2 500 000)
Net interest in joint venture - -
2015 2014
R R
Non-current assets 22 235 549 4 471 845
Current assets 18 101 875 28 281 611
Total assets 40 337 424 32 753 456
Net reserves and capital 30 077 267 20 198 266
Current liabilities 10 260 157 12 555 190
Non-current liabilities - -
Total equity and liabilities 40 337 424 32 753 456
Total comprehensive (loss)/income for the year 9 879 003 5 720 302
Cash flows from operating activities (16 777 918) 3 141 879
Cash flows from investing activities (3 506 252) 308 469
Cash flows from financing activities (5 867 582) -
* Joint Ventures
^ Associates
Company
The company acquired a 33.33% interest in October 2000 in Consilience Technologies Proprietary Limited,
the principal activity of which is the provision of various information technology related services in Africa.
In the year ended 31 March 2007 the company’s interest increased to 50.0%, and it has remained at this
level.
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the joint venture are as
follows:
Group
25
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.3 Accordian Investments Proprietary Limited ^
Shares at cost 18 000 000 18 000 000
Shareholder’s loan 10 071 801 10 063 699
Net interest in associate 28 071 801 28 063 699
2015 2014
R R
Non-current assets 309 200 334 800
Current assets 21 998 000 42 782 000
Total assets 22 307 200 43 116 800
Net reserves and capital (34 723 200) (14 687 200)
Current liabilities 47 030 400 47 804 000
Non-current liabilities 10 000 000 10 000 000
Total equity and liabilities 22 307 200 43 116 800
Total comprehensive (loss)/income for the year (3 103) (937 098)
Cash flows from operating activities (28 620 800) 1 188 421
Cash flows from investing activities (256 800) (177 288)
Cash flows from financing activities 26 817 200 (1 200 370)
* Joint Ventures
^ Associates
Group
Company
The company acquired a 40.0% interest in Accordian Investments Proprietary Limited in May 2004, the
principal activity of which is the sale of Tata passenger cars and light delivery vehicles.
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the associate, as extracted
from the unaudited management accounts, are as follows:
26
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.4
Shares at cost 500 500
94 430 612 88 800 703
Net interest in associate 94 431 112 88 801 203
2015 2014
R R
Non-current assets 194 498 733 204 808 886
Current assets 34 938 163 30 456 661
Total assets 229 436 896 235 265 547
Net reserves and capital (82 063 552) (25 711 263)
Non-current liabilities 299 596 745 183 462 632
Current liabilities 11 903 703 77 514 178
Total equity and liabilities 229 436 896 235 265 547
(5 629 909) (32 284 351)
Cash flows from operating activities 4 709 159 (3 604 474)
Cash flows from investing activities (652 201) ( 79 387)
Cash flows from financing activities (2 520 878) 4 643 734
* Joint Ventures
^ Associates
Total comprehensive loss for the year
Company
IHMS Hotels (South Africa) Proprietary Limited ^
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the joint venture are as follows:
Shareholders loan converted to equity pending
allocation of shares
The company acquired a 50.0% interest in IHMS Hotels (South Africa) Proprietary Limited in June 2006, the
principal activity of which is investing in, managing and operating hotels.
Group
27
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.5
Shares at cost - 5 600 000
2015 2014
R R
Current assets - 84 172 269
Non-current assets - 949 580
Total assets - 85 121 849
Net reserves and capital 34 367 295
Current liabilities - 50 754 554
Total equity and liabilities - 85 121 849
- 7 389 061
- (16 211 761)
- ( 64 518)
- (4 248 694)
* Joint Ventures
^ Associates
Company
TCS Africa Proprietary Limited ^
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Total comprehensive loss for the year
In November 2007, the company purchased a 40.0% shareholding in TCS Africa Proprietary Limited, a
software consultancy firm. The company sold its stake to Tata Consultancy Services Limited, India during
the year.
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the associate were as
follows:
Group
28
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.6
Shares at cost 200 200
Share premium 35 999 900 35 999 900
36 000 100 36 000 100
2015 2014
R R
Non-current assets 60 214 359 64 558 770
Current assets 4 615 690 2 546 457
Total assets 64 830 049 67 105 227
Net reserves and capital 56 024 778 59 354 664
Non-current liabilities 5 491 709 6 530 738
Current liabilities 3 313 562 1 219 825
Total equity and liabilities 64 830 049 67 105 227
(1 911 919) 20 104 958
Cash flows from operating activities 2 321 727 (5 007 970)
Cash flows from investing activities 873 176 (275 291)
Cash flows from financing activities (1 417 950) (16)
* Joint Ventures
^ Associates
Company
Newshelf 919 Proprietary Limited *
Total comprehensive (loss)/income for the year
Net interest in joint venture
In July 2008, the company acquired a 50.0% interest in Newshelf 919 Proprietary Limited, the principal
activity of which is the holding of investment property to earn rental income.
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the joint venture as
extracted from the unaudited management accounts are as follows:
Group
29
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6. Interest in associates and joint ventures (continued)
2015 2014
R R
6.7
Shares at cost 7 934 800 7 934 800
Shareholder's loan 9 009 464 9 061 277
Net interest in associate 16 944 264 16 996 077
2015 2014
R R
Non-current assets 7 944 857 8 892 290
Current assets 52 577 411 35 569 553
Total assets 60 522 268 44 461 843
Net reserves and capital 8 657 505 7 795 283
Non-current liabilities 10 527 337 9 648 210
Current liabilities 41 337 426 27 018 350
Total equity and liabilities 60 522 268 44 461 843
Total comprehensive income/(loss) for the year 759 700 ( 181 229)
Cash flows from operating activities 924 360 (7 014 544)
Cash flows from investing activities (468 190) 953 862
Cash flows from financing activities - -
* Joint Ventures
^ Associates
In March 2010, the company acquired a 40.0% shareholding in Tata Motors (SA) Proprietary Limited, the
principal activity of which is the assembly of commercial vehicles.
Company
Tata Motors (SA) Proprietary Limited ^
The company’s pro rata interest in the assets, liabilities, revenue and expenses of the associate venture are as
follows:
Group
30
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
6.
6.8 Investment in subsidiaries
Held Held
2015 2014 2015 2014
% % R R
Subsidiaries
17 472 000 100 100 1 650 000 1 650 000
100 100 100 51 51
486 952 141 100 100 9 045 192 9 045 192
2 090 000 100 100 7 917 995 7 917 995
^ 100 100 16 908 343 16 908 343
842 840 590 100 100 51 661 266 51 661 266
35 000 000 100 100 31 375 386 31 375 386
1 482 242 100 100 9 890 299 9 890 299
3 600 000 100 100 17 236 050 17 236 050
10 000 000 100 100 10 000 000 10 000 000
^ 100 100 5 279 257 5 279 257
2 000 000 100 100 20 906 430 7 230 430
100 000 100 100 799 500 799 500
^ 100 100 5 474 313 5 474 313
188 144 082 174 468 082
(13 661 266) -
174 482 816 174 468 082
TAHL (Mauritius) Power Projects Limited (incorporated
in Mauritius)
Tata Africa (Cote D'Ivoire) SARL (incorporated in Cote
D'Ivoire) @
^ per Mozambique, Senegalese and Cote D'Ivoire company law, these companies do not have issued share capital.
@ Letters of support have been issued by the Company to support these investments.
*The directors are of the opinion that the carrying value approximates the fair value of the investments. A provision for impairment of
investment in Tata Africa Services (Nigeria) Limited has been raised during the year to the value of R13 661 266 based on the net
asset value of the subsidiary.
Tata Africa Holdings (Tanzania) Limited (incorporated in
Tanzania)
Blackwood Hodge Zimbabwe (Pvt) Limited (incorporated
in Zimbabwe)
Tata Africa Steel Processors Proprietary Limited
Tata Africa (Senegal) SARL (incorporated in Senegal) @
TAHL (Mauritius) Mining Projects Limited (incorporated
in Mauritius) @
Provision for impairment of investment *
Tata Zambia Limited (incorporated in Zambia)
Tata Uganda Limited (incorporated in Uganda)
Tata Holdings Mozambique Limitada (incorporated in
Mozambique)
Tata Africa Services (Nigeria) Limited (incorporated in
Nigeria) @
Tata Africa Holdings (Kenya) Limited (incorporated in
Kenya)
Investment in associates, joint ventures and subsidiaries (continued)
Issued shares Share capital cost
Tata Africa Holdings (Ghana) Limited (incorporated in
Ghana) @
Tata Automobile Corporation (SA) Proprietary Limited
Company
31
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
R R R R
7. Other investments
6.23% (2014: 6.23%) holding in the ordinary share capital of Sepco
Communications (Pty) Limited at cost 78 78 78 78
6.23% (2014: 6.23%) holding in the preference share capital of
Sepco Communications (Pty) Limited at cost 160 659 748 160 659 748 160 659 748 160 659 748
10% (2014: 10%) holding in the ordinary share capital of Tata Steel
(KZN) (Pty) Limited at cost 24 516 634 24 516 634 24 516 634 24 516 634
0.5% (2014: 0.5%) holding in the ordinary share capital of Zega
Limited (incorporated in Zambia) at cost - 3 638 - -
185 176 460 185 180 098 185 176 460 185 176 460
Provision for diminution in value of investment (128 176 460) (24 516 634) (128 176 460) (24 516 634)
57 000 000 160 663 464 57 000 000 160 659 826
8. Prepaid operating lease premiums
Leasehold land
Balance at 1 April 37 470 182 34 890 856 - -
Amounts paid during the year 27 728 096 - - -
Charge to statement of comprehensive income (1 669 927) (1 215 044) - -
Translation reserve (1 393 365) 3 794 370 - -
62 134 986 37 470 182 - -
Less: Short term portion transferred to other receivables (1 669 927) (1 238 199) - -
60 465 059 36 231 983 - -
9. Amount owing by/to related parties
9.1 Owing by/to within twelve months
Owing by related parties
Tata group companies 619 541 094 28 295 458 594 618 049 34 104 129
Subsidiaries - - 93 229 909 3 308 771
Associates 11 291 449 33 747 489 11 363 251 33 415 360
630 832 543 62 042 947 699 211 209 70 828 260
Owing to related parties
Tata group companies 1 086 735 567 704 559 729 19 806 431 28 498 109
Holding company 83 566 7 040 337 83 566 -
Tata International Singapore Pte. Limited 80 352 737 - - -
Subsidiaries - - 497 708 576 -
Associates 56 479 076 50 741 723 - -
1 223 650 946 762 341 789 517 598 573 28 498 109
9.1 Owing by/to beyond twelve months
Owing by related parties
Subsidiaries - - 28 694 783 80 106 566
Owing to related parties
Tata International Singapore Pte. Limited 382 725 000 333 147 150 - -
Subsidiaries - - 20 885 376 42 421 556
382 725 000 333 147 150 20 885 376 42 421 556
Amounts owing to Tata International Singapore Pte. Limited, a fellow subsidiary of Tata International Limited, include an unsecured loan,
which bears interest at 7% per annum and is payable in two equal instalments on 31 December 2016 and 31 December 2017, as well as
amounts advanced to Tata Africa Services (Nigeria) Limited, Tata Africa Holdings (Kenya) Limited and Tata Africa Holdings (Ghana)
Limited, as a deposit towards share capital, pending issue of shares.
Group Company
The company holds a 6.23% (2014: 6.23%) investment in Sepco Communications (Pty) Limited, which in turn has a 51% interest in Neotel
(Pty) Limited, the second national fixed-line operator. The company has pledged its ordinary shares and preference shares in Sepco
Communications (Pty) Ltd with the lenders of Neotel (Pty) Limited. A provision for diminution in the value of investment in Sepco
Communications (Pty) Ltd was raised in the current year to the extent of R103 659 827, based on the current indicative value likely to be
received from the sale of the investment to Vodacom Limited.
The above companies are not listed and the directors believe their fair values to approximate those stated above.
32
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
9. Amount owing by/to related parties (continued)
2015 2014 2015 2014
10. Deferred tax asset / liability R R R R
Deferred tax asset
Balance at the beginning of the year 38 826 979 11 114 612 676 621 417 149
Reclassified to/ (from) deferred tax liabilities - (4 732 260) - -
Current charge 15 569 426 34 402 695 266 547 259 472
Prior year charge 1 461 769 24 480 - -
Translation reserve (2 950 843) (1 982 548) - -
Balance at the end of the year 52 907 331 38 826 979 943 168 676 621
Comprising –
Capital allowances (5 063 662) (5 872 950) 3 546 4 672
Provisions 34 600 533 28 468 411 776 647 432 019
Deferred lease liability 736 749 239 930 162 975 239 930
Tax losses available for future set-off 12 223 371 4 159 278 - -
Unrealised exchange gains or losses 10 410 340 11 832 310 - -
52 907 331 38 826 979 943 168 676 621
Deferred tax liability
Balance at the beginning of the year (10 333 370) (14 528 911) - -
Current charge 142 783 533 436 - -
Reclassified from/ (to) deferred tax assets - 4 732 260 - -
Translation reserve ( 229 898) (1 070 155) - -
Balance at the end of the year (10 420 485) (10 333 370) - -
Comprising –
Capital allowances (11 215 310) (11 054 877) - -
Prepayments 596 312 596 312 - -
Advance deposits from customers 125 779 - - -
Provisions 72 734 125 195 - -
(10 420 485) (10 333 370) - -
11. Assets classified as held-for-sale
Investment in Itezhi Tezhi Power Corporation Limited - 374 728 283 - -
12. Inventories
Raw materials and work-in-progress 67 781 515 14 278 749 - -
Finished goods 852 140 629 927 463 015 766 003 820 953
Spare parts 222 473 345 217 341 144 - -
Goods in transit 262 274 499 230 509 319 5 528 250 5 556 398
Less: Provision for obsolete stock (36 969 525) (21 541 716) ( 766 003) -
1 367 700 463 1 368 050 511 5 528 250 6 377 351
Also included is an amount of R8 694 783 due from TAHL (Mauritius) Mining Projects Limited, which is non interest bearing and not
repayable within the next twelve months.
Included in amounts owing by related parties, beyond twelve months, is an amount of R20 000 000 (2014: R34 000 000) due from Tata
Africa Steel Processors (Proprietary) Limited which has been subordinated by the Company until such time that the assets of the
subsidiary, fairly valued, exceed its liabilities.
Group Company
The Company concluded an agreement on 25 March 2015 with The Tata Power Company Limited for the sale of its interest in Itezhi
Tezhi Power Corporation Limited, a company set up to construct and operate a hydropower station in Zambia.
The amounts owing by / to related parties are interest free and are unsecured and have no specific terms of repayments other than those
indicated above.
Included in the amounts owing to related parties, beyond twelve months, is an amount of R20 885 376 (2014: R42 421 556) due to Tata
Automobile Corporation (SA) (Proprietary) Limited which is not repayable within the next twelve months, and is non interest bearing.
33
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
R R R R
13. Trade receivables
Gross trade receivables 1 101 168 658 1 111 352 864 - -
Less: Provision for doubtful trade receivables ( 48 423 530) ( 26 530 435) - -
1 052 745 128 1 084 822 429 - -
Trade receivables outstanding for a period exceeding six months
from the date they were due for payment:
Secured receivables - - - -
Unsecured receivables 137 902 381 175 432 456 - -
Less: Provision for doubtful trade receivables ( 47 360 222) (26 530 435) - -
90 542 159 148 902 021 - -
Trade receivables outstanding for a period less than six months
from the date they were due for payment and trade receivables not
due:
Secured receivables - - - -
Unsecured receivables 963 266 275 935 920 408 - -
Less: Provision for doubtful trade receivables (1 063 308) - - -
962 202 967 935 920 408 - -
14. Other receivables
Unsecured
Other advances 19 019 792 20 650 600 444 333 407 596
Prepaid expenses 20 682 403 18 880 380 753 871 -
Other deposits 32 000 1 402 882 32 000 32 000
Short term portion of prepaid operating lease premiums 1 669 927 1 238 199 - -
Value Added Tax receivable 31 397 956 22 256 224 - -
Other receivables 33 821 539 24 305 540 - -
106 623 617 88 733 825 1 230 204 439 596
15. Share capital
Authorised
400 000 000 (2014 – 400 000 000) ordinary no par value shares
400 000 000 400 000 000 400 000 000 400 000 000
Issued
84 274 485 (2014 – 74 718 060) ordinary no par value shares 84 274 485 74 718 060 84 274 485 74 718 060
16. Long term convertible equity instrument
Unsecured redeemable convertible debentures 88 367 950 88 367 950 88 367 950 88 367 950
Less: Debentures converted into ordinary shares (9 556 425) - (9 556 425) -
Less: Interest liability payments made (4 430 654) - (4 430 654) -
Less: Interest liability shown as non-current liabilities (9 517 631) (13 948 285) (9 517 631) (13 948 285)
Long term convertible equity instrument 64 863 240 74 419 665 64 863 240 74 419 665
3 years after the subscription date, 15% of the Debentures may be redeemed or converted into ordinary shares;
4 years after the subscription date, 75% of the Debentures may be redeemed or converted into ordinary shares .
The directors consider the carrying amount of trade receivables to represent the fair value of the trade receivables.
Group Company
The company issued 9 556 425 ordinary no par value shares on 15 September 2014, pursuant to conversion of debentures. The unissued share
capital of the company remains under the control of the directors until the next annual general meeting.
The Company entered into an agreement dated 23 July 2013 with Tata International Singapore Pte Limited to issue 11 250 000 unsecured
redeemable convertible debentures of SGD 1 each, carrying an interest of 5.88% pa, on the following terms:
1 year after the subscription date, 10% of the Debentures may be redeemed or converted into ordinary shares. In the current year the
option to convert into ordinary shares was elected;
34
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
R R R R
17. Deferred employee liabilities
Balance at the beginning of the year 9 051 122 9 458 643 - -
Add: Charge for the year 3 877 670 1 315 972 - -
Less: Paid during the year (4 280 341) (1 612 299) - -
Foreign currency translation reserve (495 530) (111 194) - -
Balance at the end of the year 8 152 921 9 051 122 - -
Amounts falling due after one year included in non-current
liabilities (2 832 818) (4 228 080) - -
Amounts falling due within one year included in other payables
(refer note 20) 5 320 103 4 823 042 - -
18. Long-term liabilities
Amount owing under a finance lease agreement - 56 057 - -
Term loan from State Bank of India 141 070 614 155 000 000 141 070 614 155 000 000
Loan from ICICI Bank Limited - 253 826 400 - -
Loan from Zenith Bank Plc - 3 433 930 - -
Term loan from Barclays Bank of Ghana Ltd 33 476 017 - - -
Less: Short-term portion transferred to short-term liabilities (refer
note 19) (1 070 614) (255 728 721) (1 070 614) -
Total long-term liabilities 173 476 017 156 587 666 140 000 000 155 000 000
19. Short-term liabilities
Standard Bank of South Africa Ltd 73 435 402 64 132 360 - -
Export Import Bank of India 618 329 011 667 287 943 4 248 720 17 370 855
Standard Chartered Bank Ltd 49 698 295 37 924 005 - -
Eco Bank Transnational Incorporated - 4 558 419 - -
Zenith Bank Plc 17 223 482 6 548 207 - -
United Bank of Africa Plc - 7 985 260 - -
Short-term portion of long term liabilities (refer note 18) 1 070 614 255 728 721 1 070 614 -
Total short-term liabilities 759 756 804 1 044 164 915 5 319 334 17 370 855
Group Company
Deferred employee liabilities comprise provisions for terminal benefits for permanent staff.
Import finance facilities are provided by Zenith Bank Plc to finance the working capital requirements in Nigeria. The facility is covered
by a letter of comfort from the Company, and is secured by negative pledge on the assets of Tata Africa Services (Nigeria) Limited. The
facility is at an interest rate of LIBOR +5.5%.
Standard Chartered Bank has granted facilities to the Company and it's subsidiaries which are covered by a letter of comfort from Tata
International Limited.
The loan amount of R140 000 000 (2014: R155 000 000) from State Bank of India is denominated in Rands and carries interest at the
prime lending rate less 0.25% per annum. An amount of R15 000 000 has been repaid during the year. The loan is repayable in 48
monthly instalments, with the final instalment payable in April 2020, secured over property as per note 4.
The finance lease loan, secured by motor vehicles, at an effective rate of interest of 18% per annum was repayable in monthly
instalments. The last instalment was paid on 13 April 2014.
The loan amount of USD 2 747 281 from Barclays Bank Ghana Limited carries interest at 6 months LIBOR plus 5.75% per annum. The
loan is repayable in 5 years in bi-annual instalments with 1 year moratorium and is secured by a first charge over the South Industrial
Area property, Accra, Ghana.
The Exim Bank (Export Import Bank of India) line of credit is USD denominated and carries interest at LIBOR plus 3.5% per annum
(2014: LIBOR plus 4%) and is covered by a letter of comfort from Tata International Limited.
The loan from Standard Bank of South Africa Limited is USD denominated and carries interest at 3 months LIBOR plus 2,75% per
annum. Standard Bank of South Africa Limited has granted a USD12 500 000 (2014: USD15 000 000) Revolving Trade Finance
Facility to Tata Africa Holdings (SA) Proprietary Limited and its South African subsidiaries. As at 31 March 2015 the amount utilised
was USD 6 044 066.
35
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
R R R R
20. Trade and other payables
Trade payables 363 125 561 278 108 048 - -
Other payables
Advances from customers 56 750 614 35 330 060 - -
Deferred lease liability 582 054 856 892 582 054 856 892
Short-term portion of deferred employee liabilities (refer
note 17)
5 320 103 4 823 042 - -
Statutory remittances 14 116 954 2 126 560 - -
Trade/security deposits received 62 566 - - -
Value added tax payable 6 319 214 9 222 837 905 149 1 947 414
Provisions (refer below) 29 514 321 45 803 141 1 837 862 1 542 925
Accruals 99 575 253 49 162 821 30 298 347 339 365
Sundry payables 15 744 224 35 637 718 2 767 853 2 399 636
591 110 864 461 071 119 36 391 265 7 086 232
Less: Trade payables classified as non-current liabilities (12 992 311) (14 815 591) - -
578 118 553 446 255 528 36 391 265 7 086 232
Provisions included above
Provision for warranty - 4 060 339 - -
Provision for bonus 2 141 784 6 737 026 - -
Provision for gratuity 3 882 591 7 761 495 - -
Provision for leave pay 5 084 317 2 979 058 1 837 862 1 542 925
Other provisions 18 405 629 24 265 223 - -
29 514 321 45 803 141 1 837 862 1 542 925
21. Bank overdraft
22. Revenue
Sale of goods
Motor vehicles 2 519 211 590 2 664 280 656 70 436 607 229 322 103
Spare parts 172 095 373 203 666 718 - -
Workshop 24 182 419 15 045 401 - -
Health care products 208 122 782 161 338 513 - -
Steel 359 564 206 445 764 946 46 683 -
Aluminium 55 759 265 124 758 534 - -
Mining supplies 6 573 839 3 871 528 - -
Infrastructure and construction equipment 132 939 555 111 536 149 - -
Agricultural inputs 71 156 201 36 405 678 - -
Farming equipment 146 933 268 88 973 367 - -
Food and beverages 39 388 161 39 690 159 - -
General trading 571 327 140 379 672 632 - 376 750
4 307 253 799 4 275 004 281 70 483 290 229 698 853
Services rendered
Workshop 15 180 774 12 240 755 - -
Hospitality 51 695 548 51 674 964 - -
Information technology 25 960 679 32 505 824 - -
Engineering consultancy 27 723 983 143 327 695 - 3 060 369
120 560 984 239 749 238 - 3 060 369
Rental income 9 033 410 14 502 563 20 775 718 21 841 927
Total revenue 4 436 848 193 4 529 256 082 91 259 008 254 601 149
Included in the group bank overdraft are the following secured balances: R281 019 228 (2014: R232 867 408) covered by a letter of
comfort from the holding company; R30 430 804 (2014: R28 763 915) covered by a letter of comfort from the Company, and secured by
inventory of R7 316 875 (2014: R12 933 343) and trade receivables of R2 261 810 (2014: R13 338 216); R779 981 (2014: R182 374)
secured by a legal mortgage over Taj Pamodzi Hotel, Stand No. 11864, Lusaka; and R10 291 717 (2014: R14 327 332) secured by a first
legal mortgage over Stand No. 5399, Nasser Road, Lusaka.
CompanyGroup
36
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
R R R R
23. Profit/(loss) from operations
Profit from operations is arrived at after taking into account:
Income
Management fees received - - 3 600 000 3 600 000
Service fees received 669 898 416 475 661 092 416 475
Dividends received - - 32 631 298 56 991 607
Profit on disposal of property, plant and equipment 928 696 28 328 176 30 500 27 810 496
Profit on disposal of investments 163 995 929 - 192 763 224 -
Expenses
Auditors’ remuneration 8 035 825 5 840 734 1 288 468 785 000
– current year 7 802 357 5 567 204 1 055 000 755 000
– prior year under-provision 233 468 17 247 233 468 -
– other fees and expenses - 256 283 - 30 000
Depreciation of property, plant and equipment 36 091 258 39 379 016 2 713 450 3 686 227
- leasehold improvements 116 577 105 887 116 575 105 886
- commercial land and buildings 12 528 735 12 778 925 2 159 856 2 868 908
- residential land and buildings - 88 273 - 88 273
- plant and equipment 5 516 109 4 378 461 - -
- motor vehicles 8 450 149 9 404 496 67 595 141 762
- furniture and fittings 4 884 539 8 623 132 179 369 227 867
- office equipment 3 599 019 3 840 880 190 055 253 531
- computer equipment 996 130 - - -
- capital work in progress - 158 962 - -
Amortisation of intangible assets 2 892 078 1 517 735 - -
– exploration rights 1 814 240 745 200 - -
– computer software 1 077 838 772 535 - -
Directors’ emoluments 21 825 666 27 082 747 21 825 666 27 082 747
Directors fees: 6 969 194 2 262 354 6 969 194 2 262 354
– Director A 1 755 496 741 368 1 755 496 741 368
– Director B 3 899 746 - 3 899 746 -
– Director C 383 236 436 144 383 236 436 144
– Director D 383 236 393 634 383 236 393 634
– Director E 547 480 648 697 547 480 648 697
– Director F - 42 511 - 42 511
Executive services: 14 856 472 24 820 393 14 856 472 24 820 393
– Director G 5 948 232 4 783 396 5 948 232 4 783 396
– Director H 8 908 240 6 929 099 8 908 240 6 929 099
– Director I - 13 107 898 - 13 107 898
Prescribed officers’ emoluments:
Executive services:
Prescribed officer A 496 565 - 496 565 -
Employment related expenses 311 611 779 243 561 119 24 970 242 20 710 996
– salaries and wages 275 257 888 215 304 887 23 292 450 19 883 028
– retirement contributions 14 592 961 10 176 936 633 877 441 624
– staff welfare expenses 21 760 930 18 079 296 1 043 915 386 344
Impairment of mining rights - 11 493 781 - -
Provision for impairment of investment 103 659 827 10 049 117 321 093 10 049
Loss on disposal of property, plant and equipment 27 516 - 233 468 -
Impairment of property, plant and equipment - 158 962 - -
Operating lease charges 20 855 208 31 038 065 4 839 665 5 673 609
– property 20 755 989 28 848 782 4 839 665 5 673 609
– other 99 219 2 189 283 - -
Group Company
37
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2014 2015 2014
24. Finance income / expense R R R R
Interest income
– on current accounts 10 250 864 4 498 102 3 274 896 2 257 453
Foreign exchange gains 31 397 227 13 611 455 29 069 755 7 063 212
Finance income 41 648 091 18 109 557 32 344 651 9 320 665
Interest expense
– on borrowings (121 176 335) (101 139 934) (14 892 805) (14 787 424)
Foreign exchange losses (208 399 334) (92 983 577) (46 277 239) (5 150 429)
Finance expense (329 575 669) (194 123 511) (61 170 044) (19 937 853)
25. Taxation
South African normal taxation
Normal taxation
– Current year (3 690 966) (6 141 240) - -
– Prior year under provision - - - -
Deferred taxation
– Current year 266 547 1 583 651 266 547 259 472
– Prior year under provision - - - -
(3 424 419) (4 557 589) 266 547 259 472
Foreign subsidiaries normal taxation
Normal taxation
– Current year (63 028 257) (76 057 114) - -
– Prior year under provision ( 203 280) - - -
Deferred taxation
– Current year 15 445 662 33 352 480 - -
– Prior year under provision 1 461 769 24 480 - -
Withholding tax on dividend (3 381 210) (3 482 899) - -
(49 705 316) (46 163 053) - -
(53 129 735) (50 720 642) 266 547 259 472
Reconciliation of effective tax rate 2015 % 2014 %
R R
Group
Profit before taxation 33 264 066 58 571 901
Current year's charge as a percentage of profit before
income tax 53 129 735 160% 50 720 642 87%
Disallowable expenditure (69 801 598) -210% (4 262 914) -7%
Prior year underprovision - deferred taxation 16 624 553 50% 24 480 0%
Prior year underprovision - current taxation 1 887 332 6% - 0%
Exempt income 1 888 620 6% 23 402 0%
Withholding tax (3 381 210) -10% (3 482 899) -6%
Capital gain exclusion 38 782 253 117% - 0%
Foreign tax rate differential (5 736 701) -17% (7 651 989) -13%
Effect of tax losses utilised 4 702 266 14% 3 100 164 5%
Effect of unused tax losses not recognised as deferred tax
assets (28 781 312) -87% (22 070 754) -38%
Standard tax rate 9 313 938 28% 16 400 132 28%
Group Company
38
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
2015 2015 2014 2014
Company R % R %
Profit before taxation 36 577 971 32 584 712
( 266 547) -1% ( 259 472) -1%
Disallowable expenditure (36 932 003) -101% ( 52 716) 0%
Capital gain exclusion 38 696 787 106% 1 458 042 4%
Exempt income 9 136 763 25% 15 957 650 49%
Withholding tax - 0% - 0%
Foreign tax rate differential - 0% - 0%
Effect of tax losses utilised - 0% - 0%
( 391 725) -1% (7 979 784) -24%
Standard tax rate 10 243 275 28% 9 123 720 28%
2015 2014 2015 2014
26. Guarantees
133 216 387 123 094 795 128 011 550 113 037 550
27. Financial instruments
(a) Credit risk
Exposure to credit risk
Guarantees issued by banks and financial
institutions in the ordinary course of business:
Current year's charge as a percentage of profit
before income tax
Effect of unused tax losses not recognised as
deferred tax assets
Group Company
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:
The company has exposure to the following risks from its use of financial instruments:
The Board of Directors has overall responsibility for the establishment and oversight of the company’s risk management
framework, including implementation and monitoring of these policies.
The company’s risk management policies are established to identify and analyse the risks faced by the company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the company’s activities. The company, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
Credit risk is the risk of financial loss to the company if a customer fails to meet its contractual obligations 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 related parties. Trade
receivables principally represent amounts owing to the company by their customers and credit risk is managed at that level.
Credit evaluations are performed on all customers requiring credit over a certain amount. Credit guarantee insurance is taken
against appropriate debtors. Besides for proceeds from the sale of investment that are due from The Tata Power Company
Limited, the Company has no significant concentration of credit risk, with exposure spread over a large number of customers.
● Credit risk
● Liquidity risk
● Market risk
39
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(a) Credit risk (continued)
2015 2014 2015 2014
R R R R
Trade receivables 1 052 745 128 1 084 822 429 - -
Other receivables 75 225 661 66 477 601 476 333 439 596
- - 28 694 783 80 106 566
630 832 543 62 042 947 699 211 209 70 828 260
Cash and cash equivalents 224 466 874 139 689 847 11 366 980 26 963 388
1 983 270 206 1 353 032 824 739 749 305 178 337 810
Small Medium
Enterprises 332 410 696 558 040 986 - -
Government and parastatals 65 231 798 422 885 944 - -
Corporates 633 825 058 17 654 328 - -
Foreign Companies 21 277 576 86 241 171 - -
1 052 745 128 1 084 822 429 - -
The ageing of trade receivables at the reporting date was:
Gross Impairment Gross Impairment
2015 2015 2014 2014
R R R R
Group
Not past due 489 954 343 - 491 498 414 -
Past due 0–30 days 175 861 332 - 212 433 197 -
Past due 31–60 days 113 729 125 - 127 227 509 -
Past due 61–90 days 84 385 878 ( 363 986) 104 761 288 -
Past due 91–180 days 99 335 599 ( 699 322) 175 432 456 (26 530 435)
Past due over 180 days 137 902 381 (47 360 222) - -
1 101 168 658 (48 423 530) 1 111 352 864 (26 530 435)
Company
Not past due - - - -
Past due 0–30 days - - - -
Past due 31–60 days - - - -
Past due 61–90 days - - - -
Past due 91–180 days - - - -
Past due over 180 days - - - -
- - - -
Based on past experience, the company believes that no further impairment provision is necessary in respect of trade receivables
as there is no deterioration in credit risk.
Amounts owing by related parties - current
CompanyGroup
Amounts owing by related parties - non-current
The maximum exposure to credit risk for trade receivables at the reporting date by type of receivables was:
40
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(b) Liquidity risk
Carrying 6 Months 6 – 12 More than
Group amount or less Months 1 Year
R R R R
2015
Trade payables 591 110 864 578 118 553 - 12 992 311
Other payables - - - -
Amounts owing to related parties 1 606 375 946 1 223 650 946 - 382 725 000
Long-term liabilities 173 476 017 - - 173 476 017
Debenture interest liability 9 517 631 - - 9 517 631
Dividends payable 43 822 732 43 822 732 - -
Short-term liabilities 759 756 804 689 578 214 70 178 590 -
Bank overdraft 389 681 455 389 681 455 - -
3 573 741 449 2 924 851 900 70 178 590 578 710 959
2014
Trade payables 292 923 639 278 108 048 - 14 815 591
Other payables 168 917 192 102 961 131 65 956 061 -
Amounts owing to related parties 1 095 488 939 484 581 600 277 760 189 333 147 150
Long-term liabilities 156 587 666 - - 156 587 666
Debenture interest liability 13 948 285 - - 13 948 285
Dividends payable 65 004 712 - 65 004 712 -
Short-term liabilities 1 044 164 915 592 693 508 451 471 407 -
Bank overdraft 337 302 535 337 302 535 - -
3 174 337 883 1 795 646 822 860 192 369 518 498 692
The following are the contractual maturities of financial liabilities:
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 have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring 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 company ensures that it has
sufficient cash on demand to meet expected operational expenses and liabilities as they fall due.
41
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(b) Liquidity risk (continued)
Carrying 6 Months 6 – 12 More than
Company amount or less Months 1 Year
R R R R
2015
Trade payables - - - -
Other payables 35 486 115 32 781 727 2 704 388 -
Amounts owing to related parties 538 483 949 510 492 056 7 106 517 20 885 376
Long-term liabilities 140 000 000 - - 140 000 000
Debenture interest liability 9 517 631 - - 9 517 631
Dividends payable 43 822 732 43 822 732 -
Short-term liabilities 5 319 334 5 319 334 - -
772 629 761 592 415 849 9 810 905 170 403 007
2014
Trade payables - - - -
Other payables 5 138 818 4 935 632 203 186 -
Amounts owing to related parties 70 919 665 21 703 410 6 794 699 42 421 556
Long-term liabilities 155 000 000 - - 155 000 000
Debenture interest liability 13 948 285 - - 13 948 285
Dividends payable 65 004 712 - 65 004 712 -
Short-term liabilities 17 370 855 17 370 855 - -
327 382 335 44 009 897 72 002 597 211 369 841
(c) Market risk
(i) Currency risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the company’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimising the return on risk.
The risk that the fair value or future statement of cash flows of a financial instrument will fluctuate due to the changes in the
foreign exchange rates.
42
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(c)
(i) Currency risk (continued)
The group’s exposure to foreign currency risk is as follows based on notional amounts:
2015 2014
Group USD USD
Trade receivables 18 443 976 -
Prepayments 57 802 -
Amounts owing by related parties 69 734 798 7 338 167
Foreign currency bank accounts (6 189 752) 1 012 453
Trade payables (36 222 890) (11 070 159)
Amounts owing to related parties (87 732 031) (9 918 090)
Short-term loan (40 534 214) -
Gross statement of financial position exposure (82 442 312) (12 637 629)
Forward exchange contracts 15 692 159 8 043 463
Net statement of financial position exposure (66 750 153) (4 594 166)
Company USD USD
Receivables due from related parties 53 553 292 4 422 325
Prepayments 57 802 -
Foreign currency bank accounts 908 722 803 931
Trade payables ( 379 350) (1 703 025)
Amounts owing to related parties (42 119 195) (2 517 672)
Gross statement of financial position exposure 12 021 271 1 005 559
Forward exchange contracts - -
Net statement of financial position exposure 12 021 271 1 005 559
SGD SGD
Debenture interest liability (1 094 295) (1 661 203)
The following exchange rates were applied during the year:
Rand
2015 2014 2015 2014
SGD 8.575 8.022 8.6975 8.3965
USD 11.055 10.105 12.1500 10.565
Sensitivity analysis
10% is the sensitivity rate when reporting foreign currency risk internally to key management personnel and represents
management's assessment of the reasonably possible change in foreign exchange rates.
Market risk (continued)
Average rate Reporting date spot rate
43
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(c)
(i) Currency risk (continued)
2015
2014
(ii) Interest rate risk
2015 2014 2015 2014
R R R R
224 466 874 139 689 847 52 016 164 71 102 825
(1 284 472 604) (1 538 055 116) (238 478 690) (260 738 805)
Sensitivity analysis
2015
2014
Based on the average interest bearing financial assets and effective interest rates applicable for the year ended 31 March 2015,
a 1% increase / decrease during the year would have decreased / increased profit by R10 600 057 for the Group and R1 915
477 for the Company.
Based on the average interest bearing financial assets and effective interest rates applicable for the year ended 31 March 2014,
a 1% increase / decrease during the year would have decreased / increased profit by R13 983 653 for the Group and R1 896
360 for the Company.
Carrying amount
Market risk (continued)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to the changes in
market interest rates.
At the reporting date the interest rate profile of the company’s interest-bearing financial instruments was:
A 10% weakening / strengthening in the Rand against the US Dollar would have decreased / increased equity and profit by
R81 101 435 for the Group and would have increased / decreased equity and profit by R14 605 844 for the Company, and
10% weakening / strengthening in the Rand against the Singapore Dollar would have decreased / increased equity and profit
by R951 763 for the group and the Company. This analysis assumes that all other variables, in particular interest rates, remain
constant.
A 10% weakening / strengthening in the Rand against the US Dollar would have decreased / increased equity and profit by
R15 529 814 for the Group and R2 245 345 for the Company. This analysis assumes that all other variables, in particular
interest rates, remain constant.
Carrying amount
Group Company
Financial assets
Financial liabilities
A 1% increase / decrease represents the management's assessment of the reasonably possible changes in interest rates.
44
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
(d) Fair values
Carrying Fair Carrying Fair
Group value Value value Value
R R R R
Loans and receivables
Trade receivables 1 052 745 128 1 052 745 128 1 173 556 254 1 173 556 254
Other receivables 85 941 214 85 941 214 - -
Cash and cash equivalents 224 466 874 224 466 874 139 689 847 139 689 847
Amounts owing by related parties 630 832 543 630 832 543 62 042 947 62 042 947
Other financial assets
Other investments 57 000 000 57 000 000 160 663 464 160 663 464
Financial liabilities at amortised cost
Long-term liabilities 173 476 017 173 476 017 156 587 666 156 587 666
Short-term liabilities 759 756 804 759 756 804 1 044 164 915 1 044 164 915
Trade and other payables 571 799 339 571 799 339 446 255 528 446 255 528
Debenture interest liability 9 517 631 9 517 631 13 948 285 13 948 285
Bank overdraft 389 681 455 389 681 455 337 302 535 337 302 535
Amounts owing to related parties 1 606 375 946 1 606 375 946 1 095 488 939 1 095 488 939
The fair value of financial assets and liabilities, together with the carrying amounts in the statement of financial position, are as
follows:
2015 2014
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to
which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its
entirety, which are described as follows:
Level 1 - fair value is based on quoted prices in active markets for identical financial assets or liabilities that the entity can access at
the measurement date
Level 2 - fair value is determined using either directly or indirectly observable inputs other than Level 1 inputs
Level 3 - fair value is determined on inputs not based on observable market data
All financial assets and financial liabilities have been classified as level 3 financial instruments.
45
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
27. Financial instruments (continued)
Carrying Fair Carrying Fair
Company value Value value Value
R R R R
Loans and receivables
Other receivables 476 333 476 333 439 596 439 596
Cash and cash equivalents 11 366 980 11 366 980 11 366 980 26 963 388
Amounts owing by related parties 630 832 543 630 832 543 727 905 992 150 934 826
Other financial assets
Other investments 57 000 000 57 000 000 160 659 826 160 659 826
Financial liabilities at amortised cost
Long-term liabilities (140 000 000) (140 000 000) (155 000 000) (155 000 000)
Short-term liabilities (5 319 334) (5 319 334) (17 370 855) (17 370 855)
Other payables (36 391 265) (36 391 265) (5 138 819) (5 138 819)
Bank overdraft (19 849 099) (19 849 099) - -
Debenture interest liability (9 517 631) (9 517 631) (13 948 285) (13 948 285)
Dividends payable (43 822 732) (43 822 732) (65 004 712) (65 004 712)
Amounts owing to related parties (538 483 949) (538 483 949) (70 919 666) (70 919 666)
28. Related parties
(a)
(b)
(c) Related party balances - Amounts owing by/to related parties (refer note 9).
2015 2014
Identity of related parties
The holding company of Tata Africa Holdings (SA) Proprietary Limited is Tata International Limited, incorporated in
India, which holds 88.2% (2014: 99.5%) of the company’s ordinary shares. The remaining 11.8% is held by a related
group company, Tata International Singapore Pte Limited.
The directors are listed in the directors’ report.
Directors’ remuneration – refer note 23.
46
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
28.
(d)
2015 2014 2015 2014
R R R R
Dividends received from subsidiaries - - 32 631 298 56 991 607
Management and service fees received from related parties 661 092 416 475 4 261 092 4 016 475
Rent received from related parties 5 284 784 6 330 994 20 775 718 21 821 927
Corporate office charges recovered from subsidiaries - - 18 457 824 11 669 371
Reimbursement of expenses paid to related parties 15 729 691 1 064 967 2 434 322 749 272
Brand equity expenses paid to ultimate holding company 7 339 143 4 662 040 710 056 636 503
Purchases from related parties 1 836 104 035 2 226 838 115 70 436 607 207 722 103
Services rendered to related parties - 66 364 561 - 3 060 369
Services rendered by a related party 150 708 995 79 916 414 - 2 671 247
Rent paid to related parties 5 931 902 6 579 702 5 931 902 6 579 702
Dividends paid 65 004 712 10 460 528 65 004 712 10 460 528
Interest received from related parties 1 673 551 1 580 152 3 186 092 2 054 214
Interest paid to related parties 30 706 890 11 187 070 5 389 323 3 160 422
Sale of investment to related party 576 738 229 - 576 738 229 -
Sales to holding company - 785 223 - -
Sales to a fellow subsidiary 30 942 437 6 010 908 46 683 -
Sales to associates and joint ventures included in revenue 70 436 607 207 722 103 70 436 607 207 722 103
29. Commitments
29.1 Capital commitments
Authorised and contracted for 33 735 519 15 094 629 - -
Authorised and not contracted for - 268 749 - -
33 735 519 15 363 378 - -
Related parties
Capital commitments are to be financed from existing resources.
Material related party transactions
Group Company
47
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
29. Commitments continued
2015 2014 2015 2014
R R R R
(b) Lease commitments
Non-cancellable operating lease rentals
payable as follows:
Payable within one year 27 909 995 19 815 155 3 970 946 4 413 998
Payable within 2 and 5 years 15 173 771 7 067 646 773 910 4 744 856
Payable after 5 years - - - -
43 083 766 26 882 801 4 744 856 9 158 854
30.
Group Company
Contingent liabilities
The Company entered into an agreement on or about 25 March 2015 with The Tata Power Company Limited for the sale
of its interest in ITPC, a company set up to construct and operate a hydropower station in Zambia. The Power Purchase
Agreement entered into between ITPC and ZESCO Limited, the Zambian power utility envisages an equity IRR of 18%,
in relation to the off take of power generated by ITPC. The Company could be called upon to pay The Tata Power
Company Limited, a portion of the premium received under the sale as would bear the same proportion to the reduced
equity IRR achieved if lower than the agreed 18%. The Company received a premium of USD 5.5 million under the
transaction. As the Financial Close has not been achieved, it is difficult to quantify the IRR. However, as per the latest
financial model, the equity IRR stands at 17.88%.
48
Tata Africa Holdings (SA) Proprietary LimitedNotes to the group financial statementsfor the year ended 31 March 2015 (continued)
31. Notes to the statement of cash flows
2015 2014 2015 2014
R R R R
(a) Cash generated/(utilised) from operations
Profit before income tax 33 264 066 58 571 901 36 577 971 32 584 712
Adjustments for –
Depreciation of property, plant and equipment 36 091 258 39 220 054 2 713 450 3 686 227
Amortisation of intangible assets 2 892 078 1 517 735 - -
Operating lease premiums charged to statement of
comprehensive income 1 669 927 1 215 044 - -
Dividends received - - (32 631 298) (56 991 607)
Interest received (10 250 864) (4 498 102) (3 274 896) (2 257 453)
Interest paid 121 176 335 101 139 934 14 892 805 14 787 424
Deferred employee liabilities provided 3 877 670 1 315 972 - -
Net loss/(profit) on disposal of property, plant and
equipment 901 180 (28 328 176) (30 500) (27 810 496)
Net profit on disposal of investment (163 995 929) - (192 763 224) -
Provision for property transfer tax expense 30 084 340 - 30 084 340 -
Provision for impairment of investment 103 659 827 - 117 321 093 10 049
Provision for doubtful debts 12 066 935 - 169 874 -
Write down of inventory 771 501 - 766 003 -
Impairment of property, plant and equipment - 158 962 - -
Impairment of intangible asset - 11 493 781 - -
Operating income before working capital changes 172 208 324 181 807 105 (26 174 382) (35 991 144)
(Increase)/decrease in inventories (11 930 240) (287 813 985) 83 098 (5 181 040)
(Increase)/decrease in trade and other receivables (7 201 581) (22 847 791) (790 608) 98 469
(Increase)/decrease in amounts owing by related parties (110 348 480) (347 365 082) (631 142 793) 10 264 232
Increase/(decrease) in trade and other payables 94 443 740 79 261 810 ( 779 308) 1 009 060
(Increase)/decrease in amounts owing to related parties 320 166 167 (122 014 083) 489 100 464 10 521 289
457 337 930 (518 972 026) (169 703 529) (19 279 134)
(b) Taxation paid
Amount outstanding at beginning of year (18 531 602) (16 777 536) - -
Normal income tax expense (66 922 503) (82 198 354) - -
Withholding tax (3 381 210) (3 482 899) - -
Foreign currency translation reserve 10 735 899 1 754 091 - -
Amount (prepaid)/outstanding at end of year (15 108 683) 18 531 602 ( 372 386) -
Amount paid (93 208 099) (82 173 096) ( 372 386) -
(c) Dividends paid
To equity holders of the company (64 656 625) (10 404 514) (64 656 625) (10 404 514)
To non-controlling interest ( 348 087) ( 56 014) ( 348 087) ( 56 014)
(65 004 712) (10 460 528) (65 004 712) (10 460 528)
(d) Cash and cash equivalents
Cash and cash equivalents 224 466 874 139 689 847 11 366 980 26 963 388
Bank overdraft (389 681 455) (337 302 535) (19 849 099) -
(165 214 581) (197 612 688) (8 482 119) 26 963 388
CompanyGroup
Cash and cash equivalents comprise cash on hand and balances with banks, together with holdings in money market instruments. Cash
and cash equivalents included in the statement of cash flows comprise the following statement of financial position amounts:
49