Bob has received a call from the owner of the chunk of land next to MFUL, with

a request for the company to make a financial commitment or else the land be

offered to other buyers. This has led to some panic, with Bob not ready to miss

this golden chance to expand MFUL within its present geographical location, yet

there are no ready funds to be used for this transaction. A call to the Head of

Credit at UFB has indicated that the loan could be processed within a couple of

days if all the supporting documents were submitted immediately. The Head of

Credit also reminded Bob that the annual report was the most critical document,

as it would enable the bank to make a holistic assessment of MFUL's operations

for the past few years and the company's potential to service the required loan.

Bob has now engaged Top-man for not only the compilation of the annual report

for the year ended 30 June, 2018 but also to audit the financial statements for

MFUL for the same period. Top-man will also guide MFUL in appreciating the

ramifications of the recent fiscal reforms.

Required:

Section A: Annual report and financial statements

Draft the annual report and financial statements for Modern Farmland Uganda

Limited (MFUL) for the year ended June 30, 2018.

You may assume that the audit field work has been completed and the working

papers satisfactorily reviewed with no material adjustments required, except for

some of the equipment (tractor & delivery truck) which management of the farm

has failed to present for physical verification/ inspection. You have also noted

that a downward prior year adjustment of Shs 9,045 million should be effected in

2018 to correct the overstated prior year earnings. Your team has completed

the financial statements for the year ended June 30, 2017 (see Appendix 3).

Section B: Presentation to the management of MFUL

Prepare presentation to the management of MFUL on the following matters:

B1: Relevance of financial reporting with focus on the conceptual framework

for financial reporting.

B2: Likely impact of the adoption of IFRS 9 on MFUL's operations.

B3: Appropriate corporate governance systems and business continuity

arrangements necessary for a family-owned business like FMUL.

B4: Ramifications of the fiscal reforms on the operations of MFUL.

B5: Possible measures to be adopted by the authorities to improve tax

collection.