N.P.F. in strong financial position 2017-2018
The National Provident Fund financial position for fiscal year 2017-2018 remains strong with healthy cash reserves and an overall $696 million tala in net assets.
This was revealed in their annual report for the Financial Year 2017-2018.
The NPF operational activities generated a healthy net cash flow of $19 million tala. The bulk of this cash inflow is derived mainly from contributions collected during the year less withdrawals by members.
“For its investment activities, net cash flow of $4.5 million was derived from loan settlements. Overall, the fund recorded cash and bank balances of $109 million tala as of June, 2018.
“While assets increased significantly to $699 million tala, total liabilities decreased to $2.8 million. The resultant increase in net assets of $68 million tala was due mainly to the increase in member’s contributions,” stated the report.
Through contributions of the members the fund was able to grow the lending portfolio by $33 million.
“The 45 per cent reduction in total liabilities was mainly due to the provision recorded for the arbitration case, outstanding from 2004 over the construction of the Molesi Food Court which is now settled.”
The total contributions increased to $605.5 million, an amount attributed to $30 million net contributions received less withdrawals, and the 10 per cent interest distribution credited to contributor account for 2018.
The report further states that small loans from NPF increased to $219 million for financial year 2017-2018, compared to $197 million the previous year.
“The short term loans for FY 2017-2018 were $30.4 million, an increase from the previous year which was $28.7 million.”
In relation to revenue, the NPF report stated that the overview in the last five years showed the fund’s heavy reliance on interest revenue from its lending portfolio, and its growth over the years.
“Despite limited opportunities to diversify its earning capacity the fund’s offshore investment performed quite well this financial year and it exceeded budget expectations.
“Other sources of revenue such as dividend income from equity holdings growth was also noted this year,” stated the annual report.