ANNUAL REPORT 2017 Now you can do all your banking on the phone anywhere, anytime. Download the Orient Fastpay App today -. 0800 144 551 @OrientBankUG Now you can do all your banking on the phone anywhere, anytime. ANNUAL REPORT 2017 Download the Orient Fastpay App today -. 0800 144 551 @OrientBankUG CONTENTS Corporate information 6 – 18 Report of the Directors 20 – 21 Statement of directors’ responsibilities 22 Report of the independent auditors 23 – 25 FINANCIAL STATEMENTS Consolidated and separate statements of profit or loss and other comprehensive income 26 Consolidated and separate statements of financial position 27 Consolidated statements of changes in equity 28 Separate statements of changes in equity 29 Consolidated and separate statements of cash flows 30 NOTES TO THE FINANCIAL STATEMENTS Notes to the Financial Statements 31 – 94 APPENDIX I Supplementary information to the annual report and consolidated and separate financial 95 – 99 statements Annual Report and Consolidated Financial Statements 04 For the year ended 31 December 2017 Visa Infinite. et the reconition you desere , whenever, - (, , , ) - 1 247 15 5- T Apply today for exclusive benefits! -. 0800 144 551 rientan CORPORATE INFORMATION DIRECTORS Mr. Michael Cook Chairman British Mr. Ketan Morjaria Vice-Chairman Ugandan Mr. Hemen Shashikant Shah Non Executive Director American Mr. Francis M. Byaruhanga Non Executive Director Ugandan Mr. Joram Kahenano Non Executive Director Ugandan Mr. Zhong Shuang Quan Non Executive Director Chinese (Alternative: Mr. Jay Karia) Mr. Julius Kakeeto Managing Director Ugandan Ms. Darshana Bhatia Executive Director Indian COMPANY SECRETARY Nicholas Ecimu c/o Sebalu & Lule Advocates Certified Public Secretaries (Uganda) P. O. Box 2255, Kampala COMPANY LAWYERS Shonubi Musoke & Company Advocates SM Chambers Plot 14, Hannington Road P. O. Box 3213, Kampala AUDITOR Deloitte & Touche Certified Public Accountants 3rd Floor, Rwenzori House, Plot 1, Lumumba Avenue P. O. Box 10314 Kampala REGISTERED OFFICE Orient Plaza Plot 6/6A Kampala Road P. O. Box 3072 Kampala Annual Report and Consolidated Financial Statements 06 For the year ended 31 December 2017 OUR BRANCH NETWORK OVERVIEW Branches GOVERNANCE Katwe Branch Head Office/ Main Branch Muganzirwazza Plaza - Katwe Orient Plaza, Plot 6/6A Kampala Road Kampala P.O. Box 3072, Kampala Kawempe Branch Plot 78 Bombo Road Acacia Branch Acacia Mall - Kisementi Kampala FINANCIAL STATEMENTS Kampala Kikuubo Branch Arua Branch Grand Corner House Plot 12 Avenue Road Kampala Arua Municipality Kisekka Branch Ben Kiwanuka Branch Lohana Arcade, Nakivubo Road Haider Plaza - Ben Kiwanuka Street Kampala Kampala Kololo Branch Bweyogerere Branch Nyonyi Gardens, Wampewo Avenue Mamerito House, Jinja Road, Kampala Bweyogerere Makerere Branch Entebbe Town Branch Ham Shopping Mall, Makerere Hill Road Plot 29 Kampala Road Kampala Entebbe Mbale Branch Entebbe Airport Branch Plot 23 Naboa Road Entebbe International Airport Mbale Municipality Entebbe Mbarara Branch Garden City Branch Plot 73 High Street Garden City Mall - Yusuf Lule Road Mbarara Kampala Nkrumah Road Branch Gulu Branch Mirembe Arcade, Nasser Road Plot 15 Awere Road Kampala Gulu Ntinda Branch Jinja Branch Capital Shoppers’ Mall Ntinda Scindia Road Kampala Jinja Kabalagala Branch William Street Branch Plot 1900 Ggaba Road, William Street Kampala Kampala www.orient-bank.com Annual Report and Consolidated Financial Statements 07 For the year ended 31 December 2017 ABOUT US Orient Bank is a leading private sector commercial Bank in Uganda. We began operations in 1993 and have grown steadily due to our professional management and prudent lending and investment policies. Our Vision To be the pace setter and preferred financial partner for our stakeholders Our Mission To deliver service that provides superior value to our customers OUR VALUES We summarise our core values as SPIRIT Service Resilience We provide service that is We are strong, determined and timely, helpful, friendly and adapt to the world around us convenient Integrity We are honest, open and Passion straightforward with our We are enthusiastic and self colleagues, customers, motivated to excel in all that investors, regulators and we do community Teamwork Innovation We are collaborative and We are open-minded and combine our collective constantly striving to improve knowledge and skills to our processes, platforms and outperform our competitors offerings Annual Report and Consolidated Financial Statements 08 For the year ended 31 December 2017 OUR PRODUCT PORTFOLIO OVERVIEW We are a customer focused bank and have developed tailor-made products to efficiently and effectively meet our customers needs. GOVERNANCE FINANCIAL STATEMENTS CURRENT ACCOUNTS SAVINGS ACCOUNTS Current Account (Personal & Business) Classic Saving Accounts SME Daily Account Dollar Savings Account (DOSA) Foreign Currency Account Future Children’s Savings Account (Personal & Business) CHAMA Investment Club Account Kyakala Account (Personal & Business) Diaspora Account Premium Account Target Savings Account Sapphire Account RETAIL CREDIT TRADE FINANCE CORPORATE CREDIT SME Loans Letters of Credit Commercial Loans Guarantees/Bid Bonds Overdrafts Guarantees/Perfomance/Bid Bonds OTHER SERVICES We have considerable experience in the provision of customer payments and cash management services for big organizations both local and foreign which includes; INTERNATIONAL CURRENCY SERVICES Salary Processing Internal transfers Foreign Currency Accounts Safe custody Telegraphic Transfer Collections - (Bill Payments (URA taxes, UMEME, NWSC bills, KCCA Forex charges, NSSF ) Annual Report and Consolidated Financial Statements 09 For the year ended 31 December 2017 The Bank has revamped it’s business strategy with a strong emphasis on five key pillars; Performance, Service, People, Controls and Technology. With this strategy we expect to achieve accelerated growth in the years ahead. Annual Report and Consolidated Financial Statements 10 For the year ended 31 December 2017 OVERVIEW CHAIRMAN’S 311 59 2.4 Loans & Revenue Non-Performing STATEMENT advances grew from Ugx 56 Loans ratio grew from Ugx billion to Ugx 59 remained low at GOVERNANCE 251 billion to Ugx billion 2.4% 311 billion 2018 is a special year for Orient Bank as we shall be Bank of Uganda reducing the Central Bank Rate from celebrating our Silver Jubilee. 12% at end of 2016 to 9.5% by close of 2017. On 15th March 1993, the Bank opened its doors Financial Performance FINANCIAL STATEMENTS to the public for the first time with our first branch In spite of the difficult operating environment, Orient at Uganda House. Our second branch was soon Bank managed to achieve significant growth across opened in Jinja and more recently Mbarara Branch our key indicators in the year ending December 2017. became our 22nd branch. Improved performance was particularly registered in Over the last 25 years the Bank has grown significantly. the following areas; Our customer deposits at the end of 1994 were UGX Total assets grew from Ugx 554 billion to Ugx 3.5 billion, our loans and advances UGX 354 million 681 billion and our profit before tax UGX 245 million. Today as Loans & advances grew from Ugx 251 billion to at 31st December 2017, our customer deposits were Ugx 311 billion UGX 423 billion, our loans and advances UGX 250 Deposits grew from Ugx 423 billion to Ugx 555 billion and our profit UGX 6.9 billion. billion Revenue grew from Ugx 57 billion to Ugx 59 This growth could not have been possible without the billion and, support of you our customers who have stood by us throughout the years in both good and tough times. We Non-Performing Loans ratio remained low at appreciate your loyalty and as we celebrate 25 years 2.4% of banking excellence, we renew our commitment to serve you even better in the years ahead. Strategy into the Future The outlook for 2018 is positive premised on recovery I thank our regulator, Bank of Uganda for their support in private sector credit, favourable weather conditions and partnership over the years. Your strict guidance and an increase in Foreign Direct Investment. The which we have done our best to follow has ensured Bank has revamped its business strategy with a Orient Bank stands here today strong and looking strong emphasis on five key pillars; Performance, forward to the years ahead. Service, People, Controls and Technology. With this strategy we expect to achieve accelerated growth in I also thank our staff, past and present, for their the years ahead. dedicated service to the Bank over the last 25 years. Each one of you has contributed in no small way to Conclusion the success of this Bank and I thank you for your I thank management and staff for their efforts in Service, Passion, Innovation, Resilience, Integrity and driving and delivering on the business strategy and Teamwork. for building a firm foundation for future growth. I also thank our Auditors, Legal Advisers and Board In regards to Uganda’s economic performance in Secretary for their professional input and advice. And 2017, the economy grew sluggishly with real GDP as always I am grateful to my fellow Board members growth up to 4.0% in 2017 from 2.5% in 2016. There for their support and expertise. was an overall downward inflationary trend with annual headline inflation reducing from 5.7% in December Happy Silver Jubilee Orient Bank. 2016 to 3.0 % in December 2017 and core inflation reducing from 5.9% to 3.3% over the same period.