Summary of contents Operating environment Levers of institutional growth Re-affirming the Fund s Mission Financial Highlights The future
The Operating Environment 7.00% 6.00% 5.00% 4.00% 3.00% A calm assurance is slowly returning to the economy 5.10% 5.20% GDP GROWTH RATE 4.60% 3.90% 5.80% Growth Buoyed by public investment in infrastructure Improved weather impacting agriculture Recovery of FDI Recovery of private sector credit 2.00% 1.00% 0.00% 2013/14 2014/15 2015/16 2016/17 2017/18
The Operating Environment 2016/17 6.4% This is also reflected in the reduced cost of living Inflation Drop in inflation mainly resulted from fall in core inflation. as a result of better agriculture yields; leading to lower food prices Headline Inflation 2017/18 2.2%
Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 The Operating Environment WEIGHTED AVERAGE LENDING RATES Interest Rates 30.00% 25.00% 20.00% 25.20% 20.28% 20.25% However, upward pressure manifested at close of FY as UGX faced depreciation pressure 15.00% 10.00% 5.00% 17.70% Regional market interest rates also declined on back of monetary expansion strategies 0.00% This challenged our fixed income investments Interest rates peaked in Feb 2016 And followed a downward trend since Reaching a low point in June 2018
The Operating Environment 3950 3900 3850 3800 3750 3700 3650 3600 3550 3500 3450 UGX vs USD 1-yr Trend, 2017/18 8% Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 The Uganda Shilling Our investments registered upside gains on account of a depreciating Uganda shilling: This was mainly in the investments in the key regional markets of Kenya and Tanzania
The Operating Environment USE INDEX 2500 2000 USE Index 2203 2089 Stock Markets The regional markets also performed well: 1500 1000 1750 1680 13% The Nairobi Stock Exchange Index growth of 14% 500 0 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 The Uganda Share Index And modest growth of 3% and 5.4% in Tanzania & Rwanda respectively Initially flat trend in the exchange Was followed by a strong rally
A modest rebound of the economy.set the stage for a decent performance of the Fund in 2017/18
The key levers of sustaining growth in this environment were: 1. Improving contributions; and 2. Asset Allocation Strategy
Contributions to the Fund 2017/18
Contributions Our strategy focuses on excellence in relationship management Who How Result Mandatory employers Active Engagement: Road shows, customer connect, etc Membership growth & enhanced compliance Mandatory employees Passive Engagement: SMS alerts, NSSFGO App, Support whistleblowing program Voluntary employers & employees Financial Literacy Empowered to save
Contributions But we are not afraid to crack the Whip!! Arrears Recovered Each FY From Legal Cases FY18 UGX 4B 4,004,297,601 FY17 UGX 5B 4,976,183,846 FY16 UGX 4.4B 4,399,507,357
Ugx Bns Contributions The results have been impressive by any measure ANNUAL CONTRIBUTIONS TO THE FUND 10% 14% 623 688 17% 15% 785 917 New Record 1,050 The UGX 1Tr. ceiling has been breached 2013/14 2014/15 2015/16 2016/17 2017/18 Collections in UGX Bns 623 688 785 917 1,050
Asset Allocation & Performance 2017/18
Ugx Bns Asset Allocation The investment portfolio mix continues to deliver great results! The UGX 1 Trillion Ceiling has also been broken Asset Class 16/17 Allocation 17/18 Allocation Strategic Asset Allocation INCOME IN BNS New Record 1,616 Fixed Income Equity 77% 16% 75.33% 18.09% 70% 25% 597 807 674 912 Real Estate 7% 6.53% 5% 2013/14 2014/15 2015/16 2016/17 2017/18 Income in Bns 597 807 674 912 1600 Total 100% 100% 100%
After factoring: Costs of Administration UGX 115Bn Benefits Paid out UGX 360Bn What is the net effect on Assets Under Management?
UGX Bns Well, lets just say; Things are looking great ASSETS IN BNS 1,976 In 2015, we undertook to achieve Assets Under Management of UGX 20Tr by 2025 This required a growth of UGX 1.4Tr in Assets every year We were behind track initially But are now firmly on track. 1,090 1,102 5,505 4,403 1,329 7,924 6,595 9,980 2013/14 2014/15 2015/16 2016/17 2017/18 Assets in Bns 4,403 5,505 6,595 7,924 9,980
And the dashboard says we are managing the Fund with prudence 2015/16 2016/17 2017/18 For every shilling we spent, we 8.5 generated in income For every shilling we spent, we 9.5 generated in income For every shilling we spent, we generated 14 in income Income vs Costs comparison Income in Bns Operating costs 1800 1600 1,616 1400 1200 1000 800 600 400 597 807 674 912 200 0 67 69 80 96 115 2013/14 2014/15 2015/16 2016/17 2017/18
Well done!!! But lest we forget, we exist for a purpose That purpose is defined by the Members of the Fund!!
In the prevailing environment, our mission is To pay your benefits on time once you qualify simple.. To give you a real rate of return on your savings
Benefits paid increased by 29% year on year 166 13% BENEFITS PAID IN BNS 17% 27% 237 187 278 29% 360 On average, value of benefits paid has increased by 22% per annum 2013/14 2014/15 2015/16 2016/17 2017/18
What about the return on your savings? The hurdle is 2% + the 10-year moving average inflation rate This is the benchmark to beat in order to protect your savings
% In this race, we are clearly ahead of inflation. The minimum return of 9.3% has certainly been achieved Return to Members vs Inflation 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 13% 12.30% 11.50% 11.23% 9.71% 9.71% 9.75% 9.49% 9.30% 7.71% 7.71% 7.75% 7.49% 7.30% But the Minister has sufficient room to play with 0.00% 2013/14 2014/15 2015/16 2016/17 2017/18 Return to members 11.50% 13% 12.30% 11.23% Minimum required return 9.71% 9.71% 9.75% 9.49% 9.30% Inflation rate 7.71% 7.71% 7.75% 7.49% 7.30%
Financials Bird s Eye View 2017/18
P & L Income 2018 2017 Note Ushs'000 Ushs'000 Var% Interest Income 978,134,226 781,099,059 25% Fair Value gain/(losses) from Equity Investments 145,800,776 21,877,461 566% Other Operating Income 387,590,406 27,358,145 1317% Rental Income 10,858,364 12,061,467-10% Dividend Income 52,990,410 52,311,094 1% Share of Results from Associates 6 26,664,147 24,548,507 9% Other Comprehensive Income/(loss) 12,430,101 (6,889,710) 300% Total Income 1 1,614,468,430 912,366,023 77% Increased contributions & high yield fixed income Investee company shares, currency appreciation, fair value gain on property Highlights 20% increase due to salary raises & UBRA Levy Expenditure Administrative Expenses 3 (90,751,260) (75,560,248) 20% Other Operating expenses 4 (19,153,629) (15,389,606) 24% Amortization of intangible Assets (1,746,833) (1,615,894) 8% Depreciation of property and equipment 5 (4,012,001) (3,644,286) 10% Total Expenditure (115,663,723) (96,210,034) 20% Surplus from Operations 1,498,804,707 816,155,989 84%
Balance Sheet Note 30 June 2018 Ushs'000 30 June 2017 Ushs'000 ASSETS Cash and bank balances 13 17,894,729 56,242,869 Deposits with commercial banks 14 99,835,759 224,775,364 Trade and other receivables 16 47,763,900 45,038,256 Equity securities held-for-trading 15 112,181,205 88,373,503 Tax deposit receivable 12 (c) 25,323,522 25,323,522 Investments in securities held-to-maturity 17 7,354,563,778 5,747,059,614 Equity investments at fair value through profit 1,326,207,276 899,971,553 18 or loss Loans and advances 19 22,985,894 26,879,508 Inventories (Office supplies) 20-1,187,303 Investments in associates 21 298,309,967 266,525,086 Capital work-in-progress 23 177,845,987 323,834,523 Investment properties 24 464,627,140 188,210,449 Intangible assets 25 6,628,743 5,770,533 Property and equipment 26 11,318,028 10,966,843 Tax claimable 28 16,929,197 13,894,092 Finance leases 27 630,000 650,000 Total Assets 9,983,045,125 7,924,703,018 LIABILITIES Other payables 29 32,956,932 28,259,109 Provisions for litigation 30 13,796,545 12,801,429 Total Liabilities 46,753,477 41,060,538 NET ASSETS 9,936,291,648 7,883,642,480 MEMBERS FUNDS AND RESERVES Accumulated members funds 31 9,407,593,129 7,623,061,300 Reserve account 32 105,313,084 90,069,937 Accumulated surplus 417,845,044 177,400,953 Other reserves 5,540,391 (6,889,710) TOTAL MEMBERS FUNDS AND RESERVES 9,936,291,648 7,883,642,480 Highlights Key movements on assets Key movements on liabilities
We hope this performance will put a smile on your face It did not happen by accident
In 2015, we embarked on a journey Success is defined by: Achieve Customer Satisfaction of 95% Innovate to Enable Benefits to be Paid in 24 hours Increase the Asset Base to UGX 20Tr. Enhance staff Engagement to 95% By 2025..
How are we fairing? 78% vs 91% 86% 8 vs 7 days 88% Processes Customer Satisfaction 60 80 60 80 100 120 120 0 0 145 Finance 60 9.9Tr vs 9.1 Tr 145 People 80 60 100 120 0 100 145 As at close of 2017/18 100 120 0 145 115% 110% 80 86% vs 75%
This has been made possible due to: A great team; Our Staff Well done all of you!!!
THANK YOU