ENGINEERING SOLUTIONS (U) LIMITED

SUSTAINABILITY REPORT 2019

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Table of contents

Message from the Managing Director .......................................................................................................... 2

Our company overview ................................................................................................................................. 3

Material topics .............................................................................................................................................. 9

GRI 200: Economic impacts ......................................................................................................................... 9

GRI 400: Social impacts ............................................................................................................................. 11

Reporting practices ..................................................................................................................................... 12

The UN Sustainable Development Goals (SDGs) ...................................................................................... 13

About this report ......................................................................................................................................... 14

Acknowledgements ..................................................................................................................................... 14

Further information ..................................................................................................................................... 14

Contact us ................................................................................................................................................... 14

GRI content index ....................................................................................................................................... 15

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Message from the Managing Director

The success of any organisation is defined by overall growth in the market and values in the

society. We at Engineering Solutions (U) Ltd believe in maintaining our global Quality

Standards by putting the customer as our first priority. Our vision as an organisation is to

continuously provide quality products and services that meet customer expectations whilst

focusing on continual development of our team and meeting stakeholders. We fully control our

material waste and our product is environment friendly as per global emission standards. We are

also looking forward to the growth of our dealers and suppliers. Our heartfelt desire is to bring

about an evolution in the method of Traditional Farming Operations, supplying our products

within the economic price range and to carry lowest maintenance cost. We are looking forward

to introduce new geographic and business models, to concentrate on premiumisation, creating

diversification through our best service, market expansions, achieving higher productivity, and

increasing the efficiency of our work.

We walk with a mission of contributing to the development of the Uganda agricultural sector

through the supply and support of applicable, reliable, durable and value-for money equipment

and services. As well as reaching every farmer and enlightening their lives by bringing about a

revolution in agriculture, we are prepared to face every challenge with excellent workmanship,

attracting and utilising the right talent in an optimum way and maintaining our excellent level of

corporate governance. We have tried to achieve this through creating partnerships with different

local dealers and mechanics who we fully train in all technical and mechanical skills concerning

the running and maintenance of tractors. Through this, we have both created employment

opportunities for the mechanics as well as reduced the operational costs of having to travel from

Kampala to different regions across the country to fix the machines which may have broken

down, and this has therefore greatly improved on our relations with farmers. As Engineering

Solutions (U) Ltd, we also ensure that we attend every agriculture Expo organised annually

across the country - most notably, the Harvest Money Expo and the Jinja AG Show at Namboole

Stadium and Jinja town, respectively.

Finally we would like to thank the Uganda Manufacturers’ Association and the University of

Southampton for giving us an opportunity to prepare our very first sustainability report and

report about our social, economic and environmental impacts.

Ian Walker

15 March 2020

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Our company overview

Engineering Solutions (U) Ltd (ENGSOL) is Uganda’s exclusive distributor of TAFE tractors

and a dealer of Massey Ferguson tractors and equipment. ENGSOL complements these world-

class tractors with componentsfrom Baldan, Agromaster, Fimaks and Falcon. In addition,

ENGSOL distributes dairy equipment from Sezer and S.A. Christensen;, grain milling and

storage equipment, irrigation equipment from Sezer systems and T-L Irrigation Co, garage and

workshop equipment from Ravaglioli and Jack Sealey, Sparex products, and Britpart Land Rover

parts. ENGSOL supports all the equipment imported and distributed with a large stock of

genuine parts, a skilled and committed technical support team, operator and technical training,

and manufacturer’s warranty, which contribute to ENGSOL’s reputation as the leading and most

reliable supplier of agricultural equipment in Uganda.

ENSOL’s vision is to consistently provide quality products and services that meet customer

expectations while focusing on continual development of our team and meeting stakeholders’

expectations.

Our mission is to contribute to the development of the Uganda agricultural sector through the

supply and support of applicable, reliable, durable and value-for money equipment and services.

We will strive to ensure continuous staff development and improvement, safety, efficiency,

respect and customer focus - The Entire ENGSOL Team

Our products and services

A TAFE tractor

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A Massey Ferguson tractor

Feed mill equipment

Location of headquarters

We are located at Plot 7, Spring close, 5th street, industrial area Kampala P.O Box, 25349

Kampala, Uganda.

Ownership and legal form

Engineering Solution is a limited liability company registered under the Uganda Registration

Service Bureau and all its shareholders are Ugandans.

Markets served

We primarily serve the local Ugandan market; however, we sometimes export our products to

South Sudan, DR Congo, Rwanda and Tanzania. We supply our products to very many different

Government organisations such as NAADS, Uganda Prisons, The State House and The Office of

the Prime Minister, among others. We also supply to other non-government organisations such

as Agrisave and Cowe Coffee, among others. Since we mostly target the agricultural sector, we

ensure that we participate in the Annual Harvest Money Expo where we train our different

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partners and clients how to operate our products as well as interact with them. This Expo also

provides a ready market for our equipment to the farmers from different regions of Uganda.

Our equipment during the Harvest Money Expo 2019

Our equipment at the Jinja AG show 2019

Information on employees and other workers

At ENGSOL, we have over 77 employees including both male and female since we are not

gender-biased at any point. Our employees are also recruited from different regions of Uganda.

We also have a number of contractors across Uganda who offer contract services for farmers.

All our employees are Ugandans with both Ugandan citizenship and identification (National ID,

Passports).

Gender Permanent Temporary

Male 62 0

Female 15 0

Total 77 0

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Supply chain

Significant changes to the organisation

We made a decision to offer more contract farming to farmers due to the increased/stiff

competition in the agricultural market. Therefore, the strategy was to offer more contracts and

we are actively promoting more contract activities to ensure that all farmers in different regions

of the country are able to access our equipment on credit. We are also looking forward to

acquiring a permanent contract with the Prime Minister’s Office so that we are their only

agricultural equipment supplier.

Precautionary principle or approach

We have put all environment and safety policies in place, for which we even received a NEMA

certificate. We ensure that our employees are safe at the workplace as well as in the environment

we operate in. The emphasis of safety involves adhering to all policies and principles and this is

driven by the whole management team who pass these on to the staff.

Membership of associations and external initiatives

We have different memberships of associations and external initiatives which include the

following:

➢ Uganda Manufacturers’ Association (UMA)

➢ Private Sector Foundation of Uganda (PSFU)

➢ Deri Development Agency (DDA)

➢ NARA

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Core values

Respect: Through unity in diversity, encouragement, trust, teamwork, fairness

Reward: Achievement, customer and job satisfaction, fun, challenge, development, innovation,

learning; being extraordinary

Professionalism: Honesty, flexibility, discipline, safety, commitment, responsibility,

accountability and excellence

Governance structure

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Stakeholder engagement

At ENGSOL, we have a number of stakeholders we engage with and these include the following:

Suppliers: These include service providers such as transporters and insurance providers among

others, and we mainly engage with them depending on the activity at hand. We regularly visit

our suppliers – for example, our management team travels to India to engage with our equipment

suppliers.

Government organisations: Statutory requirements – we make our payments to Government

agencies such as the URA whenever our goods come in to the country and we also continuously

engage with URA, UNBS and MIF among others. Our Chief Finance Officer goes and meets up

with the URA staff whenever our new equipment orders are imported into the country so as to

clear all the tax bills.

Staff: We always chair regular meetings at least twice a month where we engage our staff in all

activities and talk to them about the financial position of the company, financial activities of the

previous month, employee feedback and employee surveys among others. Individual

performance is assessed and then we reward the best employees. A skills analysis exercise is

done twice a year and we rate individual performance. Then we identify the gaps and provide the

training needed. We pay NSSF, PAYE, medical insurance, compensation, meals and uniforms

among other incentives to our staff.

Community: We are compliant with and respectful to our neighbours who we continuously

interact with in case of any problems or challenges. We also interact to a great extent with the

police in our area to ensure maximum safety and security in the area.

Customers: There are various ways through which we interact with our customers; these include

face-to-face meetings, walk-ins, demonstrations, customer visits, advertisements, radios, talk

shows, emails, social media and our website. We also participate in all major agricultural Expos

but mainly the Annual Harvest Money Expo organised by Vision Group.

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Silage-making demonstration

Financial institutions: They contribute to the financing of our company, establishing import

facilities, offering guarantees by the Government, financing our business activities and helping

finance our customers since the majority of our retail customers cannot afford our equipment.

We therefore work closely with banks so as to provide a cheaper credit package for our farmers

with a low interest rate. It is very important to the growth of our company and over 60 of our

customers have signed up to this project.

Material topics

GRI 200: Economic impacts

Management approach (GRI 103) -2016

At ENGSOL Uganda, since we mainly supply equipment for the agricultural industry primarily

for production, land cultivation, planting and harvesting, it is against this background that we

have considered our market presence in the agricultural sector as our economic material topic in

this year’s report. We have also progressed into processing where we supply maize-processing

equipment such as maize mills, pallet-making equipment, and milk-processing equipment,

among others. Our management approach to market presence is through providing high-quality

equipment as compared to our competitors and this has attracted very many customers including

our biggest buyer, the Government of Uganda. We regularly supply our equipment to

Government organisations – for example, we recently supplied 170 tractors to NAADS, 20

tractors to NARO and 30 tractors to Uganda Prisons plus other equipment such as ploughing

equipment, among others. Our price positioning is very competitive and it is far better than that

of our competitors, which is why we attract a large number of farmers from different regions

across Uganda.

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Agriculture is mainly practiced outside of Kampala; therefore, we ensure that we move our

products closer to our farmers and that is why our partnerships are very important. We have over

60 local dealers and mechanics who we train in technical skills, inventory management, and

profit making (to sustain the business). They also have to report to us what they do and the

different challenges, risks and opportunities they face so that we can quickly react. We also

provide discounts on our equipment so as to attract the low income farmers as well. We have

established local network partnerships in different regions across the country that sell our

equipment at a slightly high price compared to our normal prices and this has helped to the local

farmers to reduce on their transport costs since they can easily access the equipment in their

home areas. We do a great deal of customer training; for example, if we are to supply a tractor

we train the customer for two to three days (commercial training) prior to delivering the

equipment, and mechanics’ training usually takes four to five weeks. When we supplied 120

tractors to NAADS, we trained farmers for a period of five months where over 40 people from

different regions including Mbarara, Fort Portal, Arua, and Tororo were trained.

A training session for mechanics

Network partners from training

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Operators training

GRI 202: Market presence 2016

At ENGSOL Limited, we have grades which are based on positions, skills, and responsibility

and employees’ salary is associated with those grades. Our local minimum wage is 500,000

Ugandan Shillings which gradually increases according to the grade an employee is associated

with. Office helpers and turn boys are among the lowest paid employees both receiving 550,000

ugshs. Our internship trainees are usually paid 500,000 ugshs and they are generally treated as

temporary employees because most of them leave after their training period elapses. At our areas

of operation located at 5th street industrial area, 77% of our senior management is comprised of

indigenous Ugandans recruited from the different local communities across the country. At

ENGSOL Limited, we define senior management as the high ranking officials who are

responsible for the daily smooth running of our business activities and decision making. By local

we mean all the different human settlement areas in the different regions across the country.

GRI 400: Social impacts

Management approach (GRI 103) -2016

At ENGSOL Limited, we considered labor/management relations as our material topic because

we ensure that our management team interacts regularly with our staff through the different

policies set in our vision, mission and strategy. Our management approach to labor/management

relations involves chairing meetings twice a month; provide information to our teams on how all

departments in our organization are performing. The different team members carry out

Performance Management System analysis so as to meet the company targets since they are

usually the face of our business. They are the people who interact with the different customers,

government among other stakeholders so the standards are known by the staff. We pay NSSF,

PAYE, life insurance, compensation, meals both breakfast and lunch, and uniform for different

staff in the different grades and this has helped to strengthen our relations with our employees.

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GRI 402: Labour/management relations 2016

At ENGSOL Limited, we take six to nine months to put a new system in place. As an example,

when we migrated from the old information system to our new information system, our

employees were well aware of the change due and they were positive about it. In the case that we

procure new equipment, we communicate this to the employees four weeks (28 days) prior to the

implementation and we carry out training specifications of the equipment before it comes. When

the equipment arrives at our production plant, we do walk-arounds and hands-on training.

Reporting practices

Entities included in consolidated financial statements

ENGSOL Limited does not have other entities.

Defining report content and topic boundaries

Due to the stiff competition in the market we operate in, this year’s report mainly focuses on our

market presence and we have briefly described what we continuously do on an annual basis to

ensure that our market share is not threatened by our ever-emerging competitors. Among our

major stakeholders is the Government of Uganda which we closely work with and it is our

biggest customers. The Government supports us through its different agencies such as NAADS,

and Uganda Prisons. Under our social impacts, we have reported about our labour/management

relations because the great bond between our management and employees has greatly contributed

to the growth of our organisation.

List of the material topics

Market presence and Labor/management relations are our material topics in this year’s report.

Restatements of information

Not applicable.

Changes in reporting

This is the first sustainability report to be prepared by Engineering Solutions Limited.

Reporting period

1 January 2019 to 31 December 2019.

Date of most recent report

This is the first sustainability report to be prepared.

Reporting cycle

Annually

Claims of reporting in accordance with the GRI standards

This report has been prepared in accordance with the GRI Standards: Core Option.

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External assurance

This report has not been externally verified. However the following aspects are externally

audited: Quality Management System, Environmental Management and Occupational Health and

Safety Management System.

The UN Sustainable Development Goals (SDGs)

At ENGSOL Limited Uganda, we have joined the global community as partners in contributing

to Uganda’s achievement of the UN sustainable development goals. Therefore through our daily

business principles and targets, the following goals are being achieved.

As ENGSOL Limited, we are contributing to Uganda’s achievement of the 1st

Goal of ‘No Poverty’ through our market presence where we have

continuously created employment opportunities for people from the different

regions of Uganda. We employ over 77 people both male and female since our

recruitment policy is not discriminative, and this has reduced the

unemployment levels among both males and female sin Uganda. We also provide high-quality

equipment with advanced technology to farmers which has increased the agricultural efficiency

and increased the level of produce compared to the traditional ways of farming such as the use of

hoes for digging which is very time-consuming. This has helped the farmers to increase their

harvests and hence make more money to sustain their families as well as provide more

agricultural produce to the Ugandan market so as to reduce on the hunger levels, hence achieving

the 2nd Goal of ‘Zero Hunger’. The increase in agricultural produce has also led to an increase in

the exportation of agricultural products from Uganda and this has improved on Uganda’s

Balance of Payment position (BOP); hence economic growth. When our procured equipment

arrives in Uganda, we pay all taxes to the Uganda Revenue Authority and the money is directed

to other sectors of the economy hence contributing to the achievement of the 8th Goal of ‘Good

Jobs and Economic Growth’.

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Our technician demonstrating to farmers how a piece of equipment works

About this report

This is the first sustainability report to be prepared by Engineering Solutions Limited Uganda

and it mainly covers our business processes for the year 2019.

Acknowledgements

We would like to thank all our colleagues, suppliers, customers and other stakeholders for their

support in providing the information required for completion of this report. In particular, we are

grateful for the assistance provided by Dembe Dickens, the Research Assistant, in drafting this

report and Professor Ven Tauringana of the University of Southampton, the UK for providing the

technical expertise. Finally, we acknowledge the funding from the Southampton Business School

Small Research Grants which made the preparation of this report possible.

Further information

Further information about Engineering Solutions Limited Sustainability Report 2019 can be

found at our website www.engsol.co.ug

Contact us

If you have any comments regarding the report, please contact

Mr Ian Walker

ian@engsol.co.ug

+256-758-701238

P.O Box 25349 Kampala, Uganda

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GRI content index

GRI Standards Disclosure Page number

GRI 102 General Disclosures 2016

Organisational Profile

Disclosure 102-1 Name of the organisation Cover page

Disclosure 102-2 Activities, brands, products, and services 3,4

Disclosure 102-3 Location of headquarters 4

Disclosure 102-4 Location of the operations 4

Disclosure 102-5 Ownership and legal form 4

Disclosure 102-6 Markets served 4

Disclosure 102-8 Information on employees and other workers 5

Disclosure 102-9 Supply chain 6

Disclosure 102-10 Significant changes to the organisation 6

Disclosure 102-11 Precautionary principle or approach 6

Disclosure 102-12 External initiatives 6

Disclosure 102-13Membership of Associations 6

Strategy

Disclosure 102-14 Statement from senior decision-maker 2

Governance

Ethics and Integrity

Disclosure 102-16 Values, principles, standards and norms of behaviour 7

Governance

Disclosure 102-18 Governance structure 7

Stakeholder Engagement

Disclosure 102-40 List of stakeholder groups 8

Disclosure 102-42 Identifying and selecting stakeholders 8

Disclosure 102-43 Approach to stakeholder engagement 8

Reporting Practices

Disclosure 102-45 Entities included in the consolidated financial statements 12

Disclosure 102-46 Defining report content and topic boundaries 12

Disclosure 102-47 List of material topics 12

Disclosure 102-48 Restatements of information 12

Disclosure 102-49 Changes in reporting 12

Disclosure 102-50 Reporting period 12

Disclosure 102-51 Date of most recent report 12

Disclosure 102-52 Reporting cycle 12

Disclosure 102-53 Contact person for questions regarding the report 14

Disclosure 102-54 Claims of reporting in accordance with the GRI Standards 12

Disclosure 102-55 GRI content index 15

Disclosure 102-56 External assurance 13

GRI 200 Economic 9

Market Presence

GRI 103: Management approach[GRI 103] -2016 9

103-1 Explanation of material topic and its boundary 9

103-2 The management approach and its components 9

103-3 Evaluation of the management approach 10

GRI 202: Market presence 2016 11

Disclosure requirements by GRI 202-1 11

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Disclosure requirements by GRI 202-2 11

GRI 400: Social impact 11

Labor/management relations

GRI 103: Management approach[GRI 103] -2016 11

103-1 Explanation of material topic and its boundary 11

103-2 The management approach and its components 11

103-3 Evaluation of the management approach 11

GRI 402: Labour/management relations 2016 12

Disclosure requirements by GRI 402-1 12