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May 24th, 2017

Executive Director’s Speech

 

ADDRESS BY

THE EXECUTIVE DIRECTOR

  1. IAN CHINAPOO

ON THE OCCASION OF THE TRINIDAD AND TOBAGO UNIT TRUST CORPORATION’S

35th ANNUAL GENERAL MEETING HELD ON MAY 23rd, 2017 AT QUEEN’S HALL

  1. ANN’S, PORT-OF-SPAIN

Mr. Krishna Boodhai, Chairman of the Unit Trust Corporation, fellow Directors of the Trust, Representative of the Auditor General, specially invited guests, Members of the Strategic Leadership Team, Management and team members of the Corporation, Unitholders, Representatives of the print and electronic media, ladies and gentlemen.I also wish to extend a warm greeting to our online audience streaming this AGM via www.ttutc.com, I trust that you find this meeting very interactive as you too can pose questions to the Board via our UTC Facebook page and Twitter.

It gives me great pleasure to address you at our35th Annual General Meeting of the Trinidad & Tobago Unit Trust Corporation.

This year marks the 35th year of operations for us here at the UTC and my 4th year as your Executive Director.Over the past 4 years, we have made significant strides with respect to enhancing our operations, strengthening our corporate governance and risk management systems, as well as improving our overall financial strength and flexibility.  Our work, however, is still on-going as we seek to appropriately position the UTC for future long-term sustainable growth and stability.

2016 Financial Performance

I turn now to the Corporation’s2016 financial performance. I am pleased to report that the UTC recorded yet another very successful year of operations in 2016.Some of our more not able achievements for the year include:

  • Funds Under Management increased by 4.7% to TT$21.6 Billion in 2016 from TT$20.6 Billion in 2015
  • Retained Income grew by 8.6%to TT$1.3Billion in 2016 from TT$1.2Billiona year ago
  • Total Revenue came in at TT$1.1Billion compared to TT$812.4 Million a year ago, reflecting an impressive 29.5% improvement
  • Net Income After Guarantee Charges grew by a remarkable 50.4% to TT$635.8 Million in 2016 from TT$422.7 Million in 2015
  • In 2016, the total amount distributed to our unitholders in the Growth and Income Fund, the TT Dollar Income Fund and The US Dollar Income Fund was over TT$239 million cumulatively, up 45% over 2015.
  • Further, when we include the North American Fund results in 2016,distributions increased to TT$243.00 Million, up 11.03% from TT$218.85 Million in 2015, following extraordinary distributions of capital gains from the North American Fund in 2015..
  • Note that, our flagship fund, the Growth and Income Fund alone distributed TT$91.2 million, which represented an increase of 121.7% in 2016 versus TT$41.1 million in 2015.The Calypso Macro Index Fund, launched in January 2016, distributed TT$7.76 million by the end of December 2016.
  • We report that 5 of our 6 mutual funds posted similar or higher net returns in 2016over 2015
  • Our customer base also grew by 1.2% to 602,728 in 2016 from 595,706a year ago.In a country with a total population of 1.4 million, this is quite an achievement!

I wish to take this opportunity to acknowledge each and every member of Team UTC who, in one way or another, contributed to the commendable financial out turn achieved in 2016.  Let us also take cognizance of the fact that these results were achieved amid what can only be described as very difficult domestic and regional economic conditions.  Fortunately for us,we benefited from stronger than expected results in financial markets of the United States and other international markets.  This geographic diversification of our investment holdings was key to bolstering our overall financial performance, the power of diversification.

Strategic Focus

As I indicated earlier, the UTC has made significant strides. These goals have been formalized in our 5-Year Strategic Plan for the period 2016 to 2020 which was approved by the Board of Directors in 2015.  The year 2016 marked the first year of our new Strategic Plan.  The main Strategic pillars of this plan are:

  1. Regulatory Management
  2. Cost Efficiency
  3. Product & Service Innovation, and
  4. Focus on Customer and Brand

The details of these strategic pillars have been discussed in our2016 Integrated Annual Report and I wish to highlight theircurrent status. We have completed the majority of the initiatives under each pillar targeted for Year 1 in 2016.  With respect to Regulatory Management, the key initiatives during the 5-year strategic period include: the modernization of the Unit Trust’s Enabling Legislation which is the UTC Act, an Enterprise Compliance Programme, adherence to Foreign Account Tax Compliance Act,or FATCA Reporting, International Financial Reporting Standards 9 Reporting, and Enterprise Policies & Procedures documentation.  As at the end of 2016, we completed 1 initiative and 9 other initiatives are in progress as we work with our Regulatory Partners.

Under the Cost Efficiency pillar, there were 7 initiatives in progress which includes the implementation of a new Core Information Communication Technology System, a review of our ATM Card Management System, and our Structured Cost Analysis initiative, which is geared towards creating greater service value to you in a challenging cost environment.    These initiatives are on target and will be delivered over the five year strategic period.

On Product and Service Innovation, the major initiatives involve the launch of new mutual fund product offerings, the establishment of an Innovation Unit, and enabling an internal environment conducive to continuous improvement.  We completed 1 initiative and have another 5 initiatives in progress through to year 2020.

With respect to the final, and most critical pillar, Focus on Customer and Brand, some of the main initiatives in progress are the evolution of our Future Business Model, Coaching and Mentoring for Leaders, our Brand Strategy, Customer Segmentation Strategy and Trust Services Enhancements.  As at the end of 2016, we completed 2 of these initiatives and another 5 initiatives are in train.

I wish to share the words of John F. Kennedy

“Change is the law of life and those who look only to the past or present are certain to miss the future.”

Flowing from this, “Culture change” is an essential ingredient that will enable us to innovate and grow strategically as an organization and it is therefore critical to the achievement of our SP2020 strategic objectives.  That said, these are indeed very exciting times for us here at the UTC.  Change is happening right here and right now!

Human beings as “creatures of habit” almost inherently seek to maintain the routine. However, notwithstanding the general level of discomfort that we as humans experience in the face of change, we must learn to adapt to new realities or risk being left behind.  As your Partners for Life, we will assist in your evolution through all of life’s journeys and we will grow with you.

A critical lesson which we have learnt over the years is that, in a competitive environment like ours,change is perhaps the only constant.Furthermore, we either embrace that change head-on, or alternatively, we run the risk of losing focus and under-performing your expectations.

The changes that we are undertaking reflect extensive enterprise engagement with our customers and stakeholders to ascertain exactly what you, our customers, want from us as a mutual fund service provider, the limitations within our existing structures, systems and processes, and, most importantly, the various options that would allow us to bridge the gap so that we can meet, if not surpass, your expectations.  We also undertook similar evaluations in relation to our material stakeholder groups including our regulators, suppliers, the various communities which we serve, and our UTC Team members.

The organizational transformation process is well underway.  The UTC is now more operationally efficient, financially resilient, and is making tremendous progress in further refining our existing corporate governance and risk management systems.  Our UTC Team members have also now been empowered by involving them more directly in decision-making.  You can now look forward to vast improvements in our customer service delivery systems, more mutually rewarding interactions with our front-line UTC Team members, as well as new, innovative investment solutions.

Future Outlook

I turn now to our expectations for the future.Domestically,we all are aware of the recent ratings downgrades by international rating agencies Standard and Poor’s and Moody’s.  I must stress, however, that,notwithstanding the significantly weaker economic fundamentalssuch as sub-par economic growth, burgeoning fiscal deficit, rising debt to GDP level, weakening external balance of payments position and the slow pace of economic diversification, T&T still has a strong financial position with NetOfficial Reserves totaling US$9.1 Billion as at March 2017 representing 10.1 months of import cover, and over US$5.4 Billion in the Heritage & Stabilization Fund.

The prognosis for the global economy is now somewhat brighter.  According to the IMF’s April 2017 World Economic Outlook Report, there are signs that global economic activity has picked-up. Consequently, world economic growth is now projected to accelerate to 3.5% in 2017 from 3.1% in 2016,before rising further to 3.6% in 2018.  Notwithstanding, this welcomed reversal of the IMF’s outlook on future global growth prospects, various structural impediments to a stronger recovery persist and the balance of risks unfortunately remains skewed to the downside.

I assure you, our valued unitholders and other stakeholders, that the UTC will continue to protect and grow the investments in our care, befitting the words “safety”, “security” and stability” as we have done for the past 35 years.

Our Chairman has shared our commitment to Corporate Social Responsibility, so please allow me to share a short video on our partnership with the national community.

Appreciation and Closing Remarks

I would like to take this opportunity to pay tribute to Mrs. Gayle Daniel-Worrell, our former Vice President – Marketing, Communications & Distribution Channels, who retired from the Corporation on January 31st 2017.  Gayle was a true UTC stalwart having served the Corporation fervently and with unparalleled excellence over the last 30 years.  On behalf of the Board, the Strategic Leadership Team and the staff of the UTC, I extend my deepest gratitude to Gayle for her yeoman service and wish her a happy retirement and all the very best in her future endeavours.

In conclusion, I would like to extend my sincerest of thanks to the Chairman, the members of the Board,Strategic Leadership Team and all the members of Team UTC for your continued support.  Last, but by no means least, I wish to pay tribute to you, our loyal Unitholders.We thank you for your continued unwavering support and do look forward to fulfilling the twin objectives defined in our UTC mission statement: To create and enhance wealth for all by providing innovative investment solutions and world class customer service.