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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


disburseddisbursed 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


BIO Annual Report 2006