2013/2014 Annual Report 2013/2014 ANNUAL REPORT TABLE OF CONTENTS TABLE OF CONTENTS ............................................................................................................................................................................................................. II TABLE OF FIGURES ................................................................................................................................................................................................................. III LIST OF TABLES ....................................................................................................................................................................................................................... IV ABBREVIATIONS ...................................................................................................................................................................................................................... V REGISTERED ADDRESSES .................................................................................................................................................................................................... VII 1 GOVERNOR’S FOREWORD ........................................................................................................................................................................................1 2 BOARD OF DIRECTORS AND MANAGEMENT STRUCTURE............................................................................................................................ 2 3 CORPORATE GOVERNANCE .....................................................................................................................................................................................5 4 RISK MANAGEMENT OPERATIONS ..................................................................................................................................................................... 14 5 INTERNAL AUDIT....................................................................................................................................................................................................... 18 6 ECONOMIC DEVELOPMENTS AND PROSPECTS ............................................................................................................................................. 20 7 FINANCIAL MARKETS .............................................................................................................................................................................................. 44 8 FINANCIAL SECTOR SUPERVISION ..................................................................................................................................................................... 47 9 PETROLEUM REVENUE INVESTMENT ACCOUNT ........................................................................................................................................... 52 10 INFORMATION TECHNOLOGY DEVELOPMENTS ........................................................................................................................................... 53 11 BANKING, CURRENCY AND PAYMENT SYSTEMS ........................................................................................................................................... 56 12 AGRICULTURAL CREDIT FACILITY ........................................................................................................................................................................ 59 13 FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2014 ....................................................................................................................... 62 14 DIRECTORS’ REPORT ................................................................................................................................................................................................ 70 15 STATEMENT OF THE DIRECTORS’ RESPONSIBILITIES ................................................................................................................................... 72 16 REPORT OF THE AUDITOR GENERAL TO PARLIAMENT ............................................................................................................................... 73 17 FINANCIAL STATEMENTS ....................................................................................................................................................................................... 75 18 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 ............................................................................... 79 19 LIST OF APPENDICES ............................................................................................................................................................................................. 148 ii ANNUAL REPORT 2013/2014 TABLE OF FIGURES Figure 1: Commodity price developments ...................................................................................................................................... 22 Figure 2: Ten year Treasury bond yields (percent) ....................................................................................................................... 23 Figure 3: Ten year Treasury bond yields (percent) ....................................................................................................................... 24 Figure 4: The CBR and other interest rates in the economy .................................................................................................... 25 Figure 5: Evolution of the 7-day interbank rate in relation to the CBR ............................................................................... 26 Figure 6: Treasury Securities Outstanding Stock by Holder Category as at June 30, 2014 ........................................ 27 Figure 7: Comparison between Government Securities Yield Curve (June 2014 and June 2013) ............................ 27 Figure 8: Treasury bill yields .................................................................................................................................................................. 28 Figure 9: Secondary Market Trades of Government Securities July 2012 to June 2014 .............................................. 29 Figure 10: Average interest rates by sector ....................................................................................................................................... 30 Figure 11: Components of base money (shilling billions) ........................................................................................................... 31 Figure 12: Commercial banks credit growth by currency of loan denomination .............................................................. 32 Figure 13: Trends in UGX/USD exchange rate ................................................................................................................................ 37 Figure 14: Trend in the real effective exchange rate and its components ........................................................................... 38 Figure 15: GDP growth by economic activity at constant prices .............................................................................................. 41 Figure 16: Evolution of the All Share Index ........................................................................................................................................ 42 Figure 17: Sunflower farm in Gulu ......................................................................................................................................................... 59 Figure 18: Areas funded under the scheme ...................................................................................................................................... 61 Figure 19: Milk processing machine ..................................................................................................................................................... 61 Figure 20: Interest rate trends for the year ended 30 June 2014 ............................................................................................. 63 Figure 21: Exchange rate trends for the year ended 30 June 2014 ......................................................................................... 63 Figure 22: Distribution of actual expenditure ................................................................................................................................... 65 iii 2013/2014 ANNUAL REPORT LIST OF TABLES Table 1: Attendance of Board and Board Committees ............................................................................................................... 8 Table 2: Global economic growth outlook ..................................................................................................................................... 20 Table 3: Consumer price inflation developments ........................................................................................................................ 21 Table 4: Global trade growth projections ....................................................................................................................................... 24 Table 5: Commercial banks’ weighted interest rates (annual weighted average) ......................................................... 30 Table 6: Sectoral share of commercial banks’ loans and advances ....................................................................................