BIO, Belgian Investment Company for Developing Countries celebrates its fifth year of existence. 5 years of continuous work for a better future, in places where that future looked uncertain. 5 years of investing in projects to create a prospect for a better and more bearable life. 5 years of support by providing financial resources and technical assistance to micro, small and medium sized companies. The coming years will be no different. By all means and with determination and professionalism, BIO will pursue its mission in developing countries, to stimulate performing entrepreneurship, sustainable development and social balance. BIO aims to play a significant part in the permanent fight against poverty and indecent living conditions.
ANNUAL REPORT
2006
KEY FIGURES (Amounts in â‚Ź )
2006
2005
New applications
476.378.000
234.366.000
Net commitments*
- loans
46 %
51 %
- equity
54 %
49 %
- portfolio
4.464.068
1.556.545
- others
4.068.690
2.515.052
Profit after taxes
2.467.428
448.437
Operational costs / available means
1, 98 %
1, 81%
Revenues
* Contracts signed minus reimbursements plus projects approved by BoD
HIGHLIGHTS -S ME-Fund completely operational with an extension of its intervention capacity in local currencies. - Additional means granted by the government to strengthen BIO’s growth on the long-term. - Global insurance policy to cover portfolio investments against political risks. -E stablishment of a provision fund for potential short value and depreciations of portfolio investments
P refa c e Supporting small private companies in developing countries in a socially responsible way: this is one of the corner stones of the government’s Development Cooperation policy. It aims to encourage economic growth and create employment by providing support to the local entrepreneurs, thus the population. Since its inception five years ago, BIO has not only shown its strong expertise and fierce enthusiasm, but it has also proven it can offer a significant added value to the local private sector in developing countries. Economic growth, employment, commercial integration and market expansion are essential to stimulate sustainable development and to efficiently reduce poverty. BIO contributes to a favourable local economic context with a permanent concern for the ethical, social and environmental implications.
The company has now become a comprehensive, direct and active partner of entrepreneurs in a large number of emerging countries. Through the increase of financial means that I entrusted to BIO, the government supports this choice to provide funds to local entrepreneurs who have little or no access to commercial banks. This allows people with a good business sense but who are lacking financial means and management support, to benefit from a growth potential. And this is one of the aims of our cooperation with developing countries‌ The Minister of Development Cooperation.
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ANNUAL REPORT
2006
T A B L E O F CONT E NT S Key figures 2006
Inside cover
The BIO-team 02 Who is BIO? 05 Why BIO? 08 BIO on the map 12 How does BIO work? 16 Five years of BIO 20 Financial results 2006 26 Management 34
P aul G o o sse n s
S i m o n e V erbraeke n
Manager SME Fund
Investment Officer
M o s t afa Oue z ekh t i
S issi F ra n k
Manager Study Fund
Investment Officer
T H E bi o t ea m
Marie - P aule Claes
A lai n D e Muy t er
Senior Investment Officer
Manager Development Fund
S t ĂŠ pha n e R yela n d t
H ug o B o s m a n s
Investment Officer
Chief Executive Officer
Car o le m a m a n Senior Investment Officer
D i m i t ry V a n R ae m d o n c k Investment Officer
D idier Male n greau
Secretary
Investment Officer
Olivia B o urd o n ge
Mi c helle S peiser
Administration & Finance Assistant
Secretary to the Board
A n n e E m m ere c h t s
t he bi o t ea m
Na t halie D e W i n d t
Mi c h è le H uss o n
Office Manager
Senior Controller
Y u m i Charb o n n eau
A n n e D e m euse
Legal Counsel
Controller
E m m a n uelle L iesse n s
K ari n Cre m ers
Communications & Promotion Officer
Accountant
W H O I S bi o
COO P E R AT I ON W I T H D E V E L O P I N G CO U NT R I E S I S M U C H MO R E T H A N i n s talli n g P U M P S I N T H E A FR I C A N D E S E R T “Belgian Investment Company for Developing Countries” is the full name of BIO. Financial return on investment in developing countries is essential but it is certainly not the only driving force behind BIO. The company decisively goes for projects with an established added-value pertaining to sustainable development.
BIO’s aim is clear: to support small and medium-sized companies by providing them with capital as well as a range of financial services.
In the majority of developing countries, these companies fail to get appropriate financing and support. That is to say that these companies are in need for investments which can eventually significantly contribute to the development of local economies. Five years of continuous work in these investment projects. Five years of unchanging commitment during which BIO’s staff has been supporting local entrepreneurs in a financially responsible way.
“When people think of cooperation with developing countries, they only see development aid. They only think of pumps that are installed somewhere in the African desert. Those pumps are useful and important but that is not BIO’s mission. Our projects must in the first place offer added value to the countries or regions involved. This means we can ensure a financial future for the local entrepreneurs and hopefully for a large proportion of the local population. In addition to the economic and financial aspects, we also deem the social, ethical and environmental issues as essential,” says Didier Malengreau, responsible for BIO’s investments in Asia.
European cooperation BIO is an active partner within European Development Finance Institutions (EDFI) and European Financing Partners (EFP). EDFI is a group of 15 European institutions for bilateral development financing and was established in 1992. The main objective is to promote cooperation between the members and to strengthen their relationship with the European Union and in particular with the European Commission as well as with the European Investment Bank. EFP, a joint initiative of the European Investment Bank and ten members of EDFI was launched in 2004. EFP has funds worth e175 million (e100 million from the Investment bank and e75 million from contributing partners). These funds are utilized to promote financing of SME projects in the ACP-countries.
• BIO is a limited company under public law. The shares are equally divided between the Belgian State, represented by the Minister of Development Cooperation, and the Belgian Corporation for International Investment/BMI. • The Board of Directors has twelve members, of whom eight are appointed by the federal government. The Investment Committee includes five members: four directors and the CEO. • The investment funds come from the federal budget for Development Cooperation. • BIO is bound by an investment charter and has concluded agreements with the Belgian State for the good management of the funds entrusted to it.
wh o I S bi o
“BIO selects projects with an impact o n s u s t a i n a b l e d e v e l o p m e n t .� Mark Lambrechts, Chairman
BIO IS ENTERING A field USUALLY FOR SAKEN BY COMMERCIAL BANK S AND INVE STOR S AND SELECTS PROJECTS WHICH C AN CONTRIBUTE TO SOCIAL AND ECONOMIC GROW TH. THE ULTIMATE AIM IS POVERT Y REDUCTION IN DE VELOPING COUNTRIES. BIO invests directly in local SMEs, through its SME Fund. However, the analysis of such investments requires a lot of time as BIO always endeavours to assessing a project on site and to meeting the local entrepreneurs “on the shop floor”. The number of projects which can be implemented as a result is (too) limited compared to the applications that reach BIO each year. That is why BIO also invests, by way of its Development fund, in financial institutions such as banks, investment funds, leasing companies and microfinancing structures. These institutions are close to the local entrepreneur and apply the same criteria and values as BIO.
BIO targets micro, small and medium-sized companies … BIO consequently differentiates itself from other development financiers by purposely targeting micro, small and medium-sized private companies. In most of developing countries, these companies are a majority. Almost all of them face a major problem: scarce access to financing on the medium and long term. Investing in these companies consequently answers an essential need and can also have a favourable influence on the development of local economies.
… new and existing companies BIO invests in both new and existing companies that are in need for expansion financing. BIO’s investment policy is unbound. This means that the local company has no obligation to work with a Belgian partner.
BIO provides tailor-made financial solutions at market conditions.
w H Y bi o …and the poorest countries. In addition to financial criteria such as corporate governance and a healthy financial situation, BIO considers social, ethical and environmental criteria to be equally important in the selection of projects. BIO targets the poorest countries that are classified by the OECD as: • the least developed countries, • countries with a low income, • countries with an average income, lower segment. BIO has three funds available, financed by the Belgian State, that must comply with the following criteria: • The Development Fund and Local Currency Fund: minimum 70% of the funds must be invested in intermediary structures (banks, investment funds, etc.) primarily aimed at the least developed countries/LDC and with an emphasis on the partner countries of the Belgian Development Cooperation; • SME-Fund: exclusively investments in the form of loans of up to e700 000 with an investment effort of 2/3 aimed at the partner countries of the Belgian Development Cooperation; • BIO also manages two lines of subsidy on behalf of the Belgian State: a Technical Assistance Facility and a Study Fund.
w H Y bi o
The su c c ess o f m i c r o fi n a n c i n g Private individuals and small independents in developing countries usually approach commercial banks in vain. The latter consider these customers as poor borrowers who can rarely or never give any guarantee. Microfinancing focuses on this target group.
The system proves that less fortunate people are creditworthy. Worldwide, 97% of the customers pay back their microcredit in time, which closely matches the performance of commercial banks. Microfinancing Institutions provide not only credit, but also a whole range of financial services such as savings accounts. By granting loans to their clients, they allow them to build up capital, which will be mainly spent on education, health, housing,… If the disadvantaged have a stronger financial position, they are also less dependent on exploitation for example by profiteers. They can stand more securely on their own two feet which gradually shifts social power relations. Microfinancing therefore truly activates the process of ‘empowerment’. In other words it is no coincidence that Muhammad Yunus, the founder of microcredit, was awarded the Nobel Peace Prize in 2006. The Bengalese economist and banker was praised for ”his efforts to make economic and social developments possible from the down up”. Yet microfinancing is no miracle. It does not solve everything but does create opportunities. As a result more can be done to fulfil these opportunities in the most efficient way. That is why microfinancing cannot be considered separately from other development activities. BIO has become the main Belgian investor in micro-financing institutions. BIO implements strict ethical standards when it assesses a microfinancing institution: a loan provided by these of institutions means a debt to the creditor, who must be able to reimburse that debt. BIO only invests in institutions that provide loans on the basis of the solvency of the borrower.
11
Multiregional Equity
Loans
85%
15%
Geographic spread Multiregional
24%
Africa
32% Latin America BoliviA Ecuador Peru Nicaragua Central America
Latin America
23%
Asia
21%
Equity
Loans
64%
36%
bi o o N T H E M A P Equity
Asia
41%
Cambodia India vietnam Sri Lanka
Loans
Africa
59%
Angola Benin Tanzania
Equity
MOroCCo
51%
EASTERN-AfriCa MauritaniA Burkina Faso Rwanda Nigeria Senegal CameroOn
Loans
49%
mali RDC
“Each region requires a s p e c i f i c s t r a t e g i c p l a n .” Mark Lambrechts, Chairman
13
I n ves t m e n t p o r t f o li o as o f 31 de c e m ber 2 0 0 6 *
(amounts in â‚Ź)
A F R I C A ( 3 2 % ) - TOT A L I N V E S TM E NT S : 3 2 . 4 6 2 . 2 6 9 P R O J E CT
COUNTRY/REGION A CT I V I T Y
AfriCap NovoBanco PADME AfricInvest European Financing Partners European Financing Partners II African Financial Holding Zenufa Laboratories Tanzania Capital North Africa Venture Fund GroFin Mauritanie leasing Burkina Bail Magreb Private Equity Fund II REIC (outstanding balance) ProCredit Bank Congo Access Bank ART Secosen
Africa Angola Benin Africa Africa Africa Africa Tanzania Morocco Eastern Africa Mauritania Burkina Faso Africa Rwanda RDC Nigeria Senegal Senegal
Parquet Cam CEB La Meublerie Moablaou Avifarm
Cameroon Cameroon Burkina Faso Mali
Investment fund MFI MFI MFI Investment fund SME Co-operating facility Co-operating facility Financial services Pharmaceutical company Investment fund SME Investment fund SME Leasing of equipment Leasing Investment fund SME Investment fund SME Investment fund SME SME financing Mechanical maintenance Production of drinking water in plastic bags Woodprocessing Woodprocessing Egg farm Chicken Farm
EQUITY
LOAN
X X X X X
X X X X
X X X X X X X X X X X X X
A S I A ( 2 1 % ) - TOT A L I N V E S TM E NT S : 2 2 .1 6 6 . 7 6 1 P R O J E CT
COUNTRY/REGION A CT I V I T Y
Cambodian Entrepreneur Building Prasac Mekong Mekong II SREI QUIPO (IIEL) BTS Lanka Orix Grand Place Vietnam
Cambodia Cambodia Asia Asia India India India Sri Lanka Vietnam
* Projects signed and BoD approved
MFI MFI Investment fund SME Investment fund SME Leasing company Equipment rental Investment fund SME Leasing company Production of chocolate
MFI = Microfinancing Institution
EQUITY X X X
LOAN X X
X X X X X
bi o ON T H E M A P L A T I N A M E R I C A ( 2 3 % ) - TOT A L I N V E S TM E NT S : 2 3 . 3 4 5 . 2 5 2 P R O J E CT
COUNTRY/REGION A CT I V I T Y
Banco Los Andes (Caja) Banco Solidario Banco Procredit (SFE) CASEIF II Edyficar Edyficar II Financiera Procredit (Confia) Findesa Confianza TransAndean Alterfin
Bolivia Ecuador Ecuador Central America Peru Peru Nicaragua Nicaragua Peru Latin America Latin America
Banco Interfin CAREC Emprede
Central America Latin America Ecuador
MFI MFI MFI Investment fund SME MFI MFI MFI MFI MFI Investment fund SME Investment company MFI & Fair Trade Investment fund SME Investment fund SME Fish processing
EQUITY X
LOAN X X X
X X X X X X X X
X X
X X
M U L T I R E G I ON A L ( 2 4 % ) - TOT A L I N V E S TM E NT S : 2 4 . 5 8 0 . 4 6 6 P R O J E CT
COUNTRY/REGION A CT I V I T Y
Acci贸n ProCredit Holding (IMI) ShoreCap Global Microfinance Facility Impulse
Multiregional Multiregional Multiregional Multiregional Multiregional
Investment company MFI Investment company MFI Investment company MFI Investment facility MFI Investment fund MFI
EQUITY
LOAN
X X X X X
TOTAL: 102.554.747
15
“BIO MUST ACT A S A C ATALYST BY SUPPORTING PROJECTS FOR WHICH THE PRIVATE MARKE T IS NOT COMPLE TELY RE ADY. BIO MUST PL AY A TRENDSE TTING ROLE .” HUGO BOSMANS, CEO
Money... and a lot more The funds made available by the federal government to BIO must be used in an optimal way. Therefore, BIO carries out a thorough analysis for every investment project to determine whether it meets the development criteria. Each project must eventually be consistent with BIO’s objectives. BIO has a large range of instruments, which cover the entire investment cycle of a private company and can be made available to the local entrepreneur.
• Subsidies for studies A healthy economy can only rely on a dynamic and growing private sector. Unfortunately many small companies fail to be successful. By carefully assessing a plan or project, entrepreneurs can also significantly increase their chances of succeeding. Therefore it is also recommended to carry out a technical and financial feasibility analysis, both for newly created businesses and for companies with an expansion strategy. This investigation is an important tool in assessing the management team, the market situation and the financial viability of the investments. “Our Study Fund helps entrepreneurs who want to carry out a feasibility analysis. With this fund, we support up to half of the total costs with a maximum of e100 000 per project,” says Mostafa Ouezekhti, Manager of the Study Fund. “Each project that I receive is very specific. That makes it tough on the one hand but also very interesting. Each time, I learn something new. I still remember my first case. It came from a rose grower in Uganda. He wanted to grow 1 000 types of roses at high altitude. After having spent time with him, I learned so much that I have now become a bit of a rose expert myself.” Mostafa Ouezekhti is a fiery advocate of his projects. “Whether it is a fish farm in Senegal, organic chicken in Cameroon or ecotourism in Rwanda, I will stand up for them all with the same dedication.”
HOW DOES BIO WORK • Long-term financing BIO’s Development Fund provides equity, quasi-equity and loans with amounts ranging from e700 000 to e5 million per project. The financing is also possible in the local currency. This Fund supports financial institutions (e.g. banks, leasing companies, microfinancing institutions) and investment funds. It also provides direct investments to medium-sized companies that offer a clear growth potential. Sissi Frank is one of the Investment Officers. She is responsible for projects in Latin America. “It is my duty to investigate the investment opportunities. We get requests through various channels: colleagues from other DFIs (Development Finance Institutions), financial partners or, increasingly, directly from entrepreneurs we meet during our trips relating to different projects.”
17
• Support of SMEs The SME Fund exclusively provides direct financing to SMEs. These companies are the main source of employment both in developed and emerging countries. Moreover, they ensure a regular economic growth and social stability. By providing direct loans of up to e700 000, BIO lowers the threshold and allows SMEs in developing countries to attract appropriate financing. The SME Fund evaluates expansion plans and new projects based on a solid business plan. The Fund focuses on SMEs with an annual turnover lower than e40 million. It’s a deliberate choice as it allows BIO to be a major partner in financing their growth and strengthening their position.
“Direct investments allow us to decide ourselves which sectors we want to support. As we have personal contacts with the entrepreneurs, we get a better sense of what is happening on the market in which we invest”, Paul Goossens, Manager of the SME Fund emphasises. The majority of SME projects are located in Africa as well as in the farming sector and light industry. “A typical example is a project in Senegal, where we invest in a new company that sells mineral water in bags. This has proven to be a very interesting market at a local level.”
Finally BIO also supports technical assistance. Technical assistance is a powerful tool to achieve the objectives of the companies in which BIO invests. BIO provides financial support by means of grants, to give them a chance to significantly develop their capacity and to expand the know-how and skills of their staff. This way they must be able to face major challenges such as a continuous improvement of profitability, introduction of processes in order to attain a more efficient
H O W DH O E SWBEI ROKWT ObiR oK
• Technical assistance
way or working, development of new products and technologies and expansion of the service package. BIO is a major partner for all companies involved, as it provides not only financial investments, but also financial support for technical and business solutions, seminars and training programmes and management development.
• Evaluation system BIO is working on a new evaluation system to assess not only the return on investment of a project, but also its development impact. The study involves several indicators and aims to give an actual representation of all aspects of the project.
JAAR
RAPPORT
2006
These assessments are essential as BIO applies strict business standards such as risk management, but also regards corporate governance, social ethics and environmental issues as crucial elements.
19
F ive years o f B I O : a s t eady gr o w t h BIO commenced in 2002 and has recently completed its fifth year of activity. A short overview: During the first year of activity, BIO took a careful start. In that year it received 46 investment applications, which resulted in five signed contracts. Over the next four years BIO set greater steps. Thanks to its growing reputation, the number of investment applications increased. In 2006 it received no less than 226 applications. Thirteen contracts were actually signed and 8 cases were approved by the Board of Directors.
In the first five years BIO received a total of 607 requests for investments, resulting in 46 signed contracts, with an investment portfolio of almost e110 million.
B I O weighs i t up The decision-making process at BIO proceeds through various phases. • Each application reaching BIO is subject to a first internal
screening.
• In the event of a positive assessment, a so-called ‘admission approval’ is put in writing, and subsequently submitted to the Investment Committee. • When the Investment Committee gives a green light, an ‘investment analysis’ is presented to the Board of Directors who approves or rejects the project. • After approval by the Board of Directors, the contract is negotiated and (usually also) signed, although certain circumstances, such as political unrest, may result in the agreement not being signed or a project not being implemented.
Mark Lambrechts, Chairman
5 YEARS OF BIO
“Each application is subject to an i n - d e p t h s c r e e n i n g .”
21
If we look at the geographic spread (graph 2), we see a relatively balanced distribution between the various continents. Whilst in 2002 only 4% of the projects were located in Africa, this figure rose to 32% in 2006. 36% of the projects were to be found in Latin America in the first year, where as today this is 23%. In 2006 there was also a balance between loans and equity with respect to the various forms of financing (graph 3). If we consider the target groups (graph 4) then it appears that the number of projects with SMEs has grown.
Graph 1: evolution of approved projects and signed contracs 60 approved projects
50
signed contracts
40 30 20 10 88
55
2002
88
88
2003
15 15
10 10
2004
11 11
14 14
2005
88
99
2006
53 53
46 46
Totaal
BIO had 46 projects running in 2006, while 53 had already received approval form the Board of Directors.
Graph 2: evolution of geographic spread 2002-2006 60 Africa (%)
50
Latin America (%) Asia (%)
40
Multiregional (%)
30 20 10 4 36 33 27
30 28 23 19
33 28 19 20
36 24 19 21
32 23 21 24
2002
2003
2004
2005
2006
While the projects were mainly located in Latin America in the first year, a balanced spread over the various continents appeared over the last five years.
5 YEARS OF BIO Graph 3: evolution of different types of financing 80 Loans (%)
70
Equity (%)
60 50 40 30 20 10 36
64
2002
43
57
2003
56
44
2004
57
43
2005
46
54
2006
During the first year of activity, subscriptions to capital were more important than loans.
Graph 4: evolution of target groups SME (%)
80
Microfinancing (%)
70 60 50 40 30 20 10 59
41
2002
65
35
2003
57
43
2004
56
44
2005
64
36
2006
The number of projects involving SMEs increased significantly in 2006.
23
“In 2006, BIO received 2 2 6 i n v e s t m e n t a p p l i c a t i o n s .� Mark Lambrechts, Chairman
25
B ala n c e S hee t ASSETS
2006
2005
FIXED ASSETS
58.332.470
56.928.882
Formation expenses Intangible assets Tangible assets Furniture and vehicles Leasing and similar rights Other tangible assets Financial assets Participating interests in affiliated enterprises Participating interests in other enterprises Amounts receivable and cash guarantees
52.342 23.465 310.267 169.024 12.530 128.712 57.946.396 - 27.356.753 30.589.643
100.041 29.321 259.764 142.567 17.947 99.249 56.539.755 656.946 24.598.781 31.284.028
CURRENT ASSETS
94.766.098
73.853.718
Amounts receivable within one year Investments Cash at bank and in hand Deferred charges and accrued income
2.213.659 91.143.724 299.056 1.109.659
1.000.314 71.799.732 153.943 899.728
153.098.568
130.782.600
2006
2005
CAPITAL AND RESERVES
147.857.841
128.599.238
Capital Reserves Legal reserve Reserves not available for distribution Profit carried forward**
4.957.873 14.862.191 495.787 141.366.404 1.037.777
4.957.873 123.613.811 495.787 123.118.023 27.554
(Amounts in â‚Ź)
TOTAL ASSETS
LIABILITIES
(Amounts in â‚Ź)
CREDITORS
5.240.727
Amounts payable after more than one year Amounts payable within one year Current portion of amounts payable after more than one year Trade debts Taxes, remuneration and social security Other amounts payable* Accrued charges and deferred income
5.721 1.792.863
12.120 417.456
6.392 59.460 269.804 1.457.206 3.442.143
6.753 181.510 229.193 1.753.786
153.098.568
130.782.599
TOTAL LIABILITIES * Subject to approval by the General Assembly on 10/05/07
2.183.362
Formation expenses
Receivables are valued at nominal value.
In addition to the notary fees, preliminary
Additional costs relating to the acquisition are
expenses related to the setting up of BIO, the
charged to the financial year during which they
establishment of the Local Currency Fund and the
were incurred. Depreciation takes place if there is
SME-Fund, the increase of the financial resources
uncertainty as to reimbursement of all or part of
of the Development Fund, were capitalised.
the amount receivable on the due date.
Formation expenses are depreciated on a straight line basis over 5 years
This year, a general provision has been established for expected short value and reduction in value,
Intangible assets
which represents 1,5% of the outstanding
Expenses relating to the purchase of software,
amounts of the Development Fund and the Local
amounting to at least e1,250, are capitalised and
Currency Fund, plus 10% of the outstanding
depreciated on a straight line basis over 3 years
amounts of the SME Fund. This percentage will
from the date of acquisition.
be adapted annually according to the portfolio
F i n a n c ial resul t s 2 0 0 6
NOT E S TO B A L A NC E S H E E T
turnover and each actual reduction in value will
Tangible assets
be compensated by the provision. This provision
This item relates to office furniture, computers and
will be limited to a maximum of 3% of the
other office equipment and the furnishing of the
outstanding amounts of the Development Fund
rented facilities. Amounts are capitalised as from
and the Local Currency Fund at the end of each
e1,250, depreciation is on a straight line basis
fiscal year.
from the month of acquisition over 10 years for the office furniture, over 3 years for the computer
If the exchange risk and the currency risk are
equipment and pro rata to the remaining term of
covered by a financial instrument that meets the
the lease agreement.
hedging criteria on an ongoing basis, in terms of maturity, interest and currency, valuation of the
Financial assets
financial instrument follows the valuation rules
This item relates to the investments, irrespective
for the underlying asset.
of their percentage, as described in BIO’s mission statement. Unallocated cash remains under
BIO’s liabilities at the end of the fiscal year are
investment and/or cash at hand and in bank. The
converted at the closing rate of the financial year
equity participations and shares are stated at
and referred off-balance sheet. The submission of
acquisition cost. Incidental expenses relating to
a letter of intent to a potential customer implies
the acquisition are charged to the financial year
the off-balance sheet registration of the amounts
during which they were incurred. With regard
committed.
to the unlisted shares, a decrease in value is applied in the event of capital loss or long-term
The interest and currency risk related to 9 loans
depreciation.
amounting to a total of $16.3 million was covered
These assets will remain valued at a historical
by an interest and currency swap (CCIRS/Cross
exchange rate. The Board of Directors will
Currency Interest Rate Swap), converting the
determine case by case from when reductions in
counter value of the future instalments and
value are lasting and lead to the booking of an
interest payments into EUR loans at fixed interest.
actual short value or reduction in value.
Three loans for a total amount of $1,8 million were covered by 3 future currency contracts.
27
Amounts receivable within one year
to the next fiscal year. The result of fiscal year
These amounts mainly refer to the subsidy granted
2006 (e2.467.428,48) has been partly allocated
according to the administration agreement dated
to BIO’s personnel (e80.000) by means of profit
21 December 2006 (e2.000.000).
participation and paid as dividend (e1.377.205,71).
A provision for reduction in value has been
The balance will be transferred to the next fiscal
created to cover an outstanding claim of $53.087
year.
or e44.080,75 resulting from a transfer of shares to Rwandan Entreprise Investment Company.
Amounts payable after more than one year
Cash at bank and in hand
This
This item includes unallocated cash of which BIO
telecommunication means. Remaining term to
disposes to implement its corporate mission.
maturity is less than 5 years. The outstanding debt
Deposits and long-term accounts with credit
resulting from a leasing agreement is calculated
institutions and cash at hand are valued at par.
every year in line with the capital value listed in
No value adjustments were applied.
the contract and the instalments to be paid in
column
lists
the
lease
due
for
later fiscal years.
Deferred charges and accrued income This item includes deferred costs (e89.682),
Amounts payable within one year
accrued
positive
Lease debt for telecommunication means,
conversion variances e72.000. Deferred costs
falling due in the fiscal year, are listed in this
of e89.682 mainly consist of rent, insurance,
column. Commercial debts comprise e44.228 of
subscriptions, travel expenses and legal fees. The
outstanding invoices and e15.232 of receivable
fees of outside lawyers used in obtaining projects
invoices.
in portfolio are spread over the duration of the
corporation tax (not due yet) of e64.062. Debts
project or over 10 years, in case of participations
relating to remunerations and social security
that may remain in the portfolio for an indefinite
concern the provision for statutory holiday pay
period. They are recorded in the deferred
and a wage balance of December 2006 amount
charges line. Accrued income of e947.977 mainly
to a grand total of e269.804.
consists of accrued interest, not overdue on
The remaining debts amounting to e1.457.206
loans granted. The positive conversion rates to
relate to the due profit participation and dividend
an amount of e72.000 contain the difference in
payment consequent to the distribution of profits
rate between the cash rate and cover rate. These
for 2006.
income
(e947.977)
and
Tax
debt
includes
preliminary
conversion rates are spread over the duration of the instrument used and the loans.
Deferred charges and accrued income This column includes costs to be charged
Reserves
amounting to e699.782. This is mainly the
The development certificates are included in
provision for interest incurred and not due to
unavailable reserves. Depreciation and capital
the CCIRS contracts amounting to e326.351
losses are directly charged to these certificates
and a subsidy of e373.431 granted by contract.
without having to proceed to a modification of
The accrued income amounts to e2.742.361,
the articles of association. At the end of 2002
including TA and Study Fund subsidies, which will
â‚Ź62,070 was charged to the certificates. The result
be granted in later fiscal years.
of the fiscal year 2004 was allotted to the legal reserve, bringing it up to e74,905. Of the 2005 result (e448,437), e420,882 was allotted to the legal reserve, which reached its limit of 10% of the capital. The balance has been transferred
disbursed disbursed USD INR KHR F C F A eur o eur o equiv . i n Signed projects
30.500.788
3.300.000
2.328.092.000
738.132.487
32.588.087
58.885.844
equity participations investment funds 10.435.325 0 - 0 4.718.503 13.253.418 equity participations 716.670 3.300.000 2.328.092.000 0 13.444 570 14.519.936 loans investment funds 4.781.066 0 - 0 75.015 3.789.527 loans 14.567.727 0 - 738.132.487 14.350.000 27.322.963 Total projects 2006 30.500.788 3.300.000 2.328.092.000 738.132.487 32.588.087 58.885.844
F i n a n c ial resul t s 2 0 0 6
F i x ed asse t s
Off - bala n c e c o m m i t t ed i n Signed projects
commit ted USD
INR
KHR
19.314.675
0
0
F C F A eur o eur o equiv . 0
18.073.949
32.702.884
equity participations investment funds 11.814.675 0 - 0 9.281.497 18.229.932 Equity particpations 0 0 - 0 4.986.730 4.986.730 loans investment funds 0 0 - 0 2.705.702 2.705.702 loans 7.500.000 0 - 0 1.100.020 6.780.520 BoD approved projects 12.300.000 0 0 0 1.650.000 10.966.020 equity participations investment funds 300.000 0 - 0 0 loans investment funds 5.000.000 0 - 0 - loans 7.000.000 0 - 0 1.650.000 Total projects 2006 31.614.675 0 0 0 19.723.949
227.220 3.787.000 6.951.800
43.668.904
29
I n co m e s tat e m e n t 2006
2005
Income
8.532.758
4.071.598
Income from financial fixed assets Income from current assets Other financial income Other operating income Exceptional income Charges
2.537.593 3.306.851 15.269 746.570 1.926.475
1.556.545 1.930.182 11.307 573.563
6.065.330
3.623.161
Services and other goods Remuneration, social security costs and pensions Depreciation Short value Other operating charges Financial charges Extraordinary charges Taxes
1.671.033 1.429.295 123.229 44.081 523.325 1.219.686 1.025.705 28.976
1.501.118 945.504 120.369
Profit for the period
2.467.428
448.437
(Amounts in €)
279.270 559.195 217.705
NOT E S t o I NCOM E S T A T E M E NT Operating income Other
operating
income
e470.444 approved subsidy for TA and Study incorporates
the
e611.596 subsidy related to the TA and the Study
Fund, various taxes and levies (e35.582) and reimbursable expenses (e17.299).
Fund, various fees for e29.116 and a re-invoicing of costs amounting to e105.858.
Financial income The income from BIO’s core activity in 2006
Operating charges
consists of the returns on loans granted, amoun-
The column “miscellaneous goods and services”
ting to e2.322.588 and dividends amounting to
includes general operating costs such as rent and
e215.004. Income from the deposit of unalloca-
related charges, insurance, office supplies, mem-
ted cash of which BIO disposes to implement its
bership fees and documentation, remuneration
corporate mission amounted to e3.306.851. The
costs, fees, travel expenses, promotion costs. In
income from CCIRS is included under this hea-
2006 these charges amounted to e1.671.033. Re-
ding. Other financial income (e15.269) mainly
muneration, social security contributions, staff
relates to differences
insurance and extra legal benefits amounted to e1.429.295. Depreciation on tangible assets
Financial charges
amounted to e123.229 and reduction in value on
The “interest payable and similar charges”
receivables amounted to e44.081.
column includes the interest on the leasing contracts and the CCIRS, for a total amount of
Other operating charges of e523.325 relate to
e1.142.519. Other financial charges refer to the
Income taxes
the results of exchange rates amounting to
This column contains foreign taxation on 2006
e36.505 and e23.520 of banking costs relating
revenues as well as taxes on the 2004 and 2005
to payments for projects, guarantees and the
results.
use of financial systems.
CASH FLOW (Amounts in â‚Ź)
Operating result / EBIT
2006
2005
-4.070.098
-2.272.698
F i n a n c ial resul t s 2 0 0 6
interests on receivables amounting to e17.142,
Adjustment Depreciation, decrease in value -129.647 -120.369 Provisions 2.990.644 436.264 Operating cash flow
-1.209.101
-1.956.802
185.783
-822.871
Cash flow from working capital changes
-1.023.318
-2.779.673
Acquisition of financial assets Acquisition of tangible and intangible assets
-2.493.730 -126.593
-25.676.217 -124.528
Cash flow from investment activities
-3.643.641
-28 580 418
Income from current assets Income from financial fixed assets Other financial income Other financial charges Plusvalue Taxes
3.306.851 2.537.593 15.269 -1.219.686 1.926.475 -218.532
1.930.182 1;556.545 11.307 -559.195 -184.721
Net financial income
6.347.970
2.754.118
Free cash flow
2.704.329
-25.826.300
-6.399 0 16.791.176
3.633 0 35.895.000
16.784.777
35.898.633
Net flow of funds
19.489.105
10.072.333
Net variation in deposits and cash
19.489.105
10.072.333
Current debts & receivables (net)
Increase/decrease of longterm financial debts Increase/decrease of capital Development certificates Proceeds from financing
31
R evis o r rep o r t
rep o r t o f t he c o ur t o f audi t
33
board of directors HRH Prince Philip is Honorary Chairman of BIO
Chairman
Mark Lambrechts Board Member of Companies
Vice-Chairman
Philippe Wilmès Chairman, Belgian Corporation for International Investment/BMI-SBI Prof. Em., UCL Extraordinary Prof., Institute for Business Administration and Management, UCL
Members
Marc Cogen Prof. of International Law, University of Ghent Marcel Colla Honorary Senator, Member of the Executive Board of the World Health Organisation Bernard de Gerlache de Gomery Chairman of the Chamber of Commerce C.B.L.-A.C.P Board Member of Companies Jean-Pierre Smit Deputy Manager, International Relations Department, AGORIA Walter Stevens Deputy Manager, Strategic Cell of the Minister of Foreign Affairs Florence Thys Advisor Institute Emile Vandervelde/IEV Martine Van Dooren Director General, Directorate-General for Development Cooperation Damien Van Eyll Institutional Reforms Department, Strategic Cell of the Deputy Prime Minister and Minister of Finance Michel Van Hecke Vice-Chairman, Belgian Corporation for International Investment/BMI-SBI Prof. Em. Economics, University of Antwerp Johan Van Wassenhove Chief Executive, Officer Denys SA
Chairman
Philippe Wilmès
Members
Hugo Bosmans
BOARD
Investment Committee
Marc Cogen Marcel Colla Florence Thys
Belgian Court of Audit Jozef Beckers Counsellor
Government Commissioners Frank Blomme Inspector of Finance Luc Langouche Secretary General, Iles de Paix
Auditors Luc Van Coppenolle Deloitte, Company Revisors / SC s.f.d. SCRL
35
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N o t es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
A v e n u e d e T e r v u r e n l aa n 1 8 8 a - b 4 1150 brussels - belgium Tel.: +32 (0)2 778 99 99 Fax: +32 (0)2 778 99 90 www.b-i-o.be Design & production: w w w . t h e c r e w c o m m u n i c at i o n . c o m