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ANNUAL REPORT 06

THE INDUSTRIALISATION FUND

FOR DEVELOPING COUNTRIES

Bremerholm 41069 Copenhagen K · DenmarkTel +45 3363 7500Fax +45 3332 [email protected] No. 23598612

T H E I N D U S T R I A L I S A T I O N F U N D F O R D E V E L O P I N G C O U N T R I E S

BU

CHS.

DK

Danish International Investment Funds

Danish International Investment Funds is the umbrella term for IFU, IØ and IFV.

Each of the Funds operates in its specific geographical sphere:

• IFU in developing countries with a per capita income below 80% of the World Bank’s upper limit for new

loans with maturities of 17 years (USD 2,772 in 2007) and South Africa, Botswana and Namibia

• IØ in the Russian Federation, Ukraine and Belarus

• IFV in developing countries with a per capita income originally above the IFU limit

(IFV has stopped making new investments)

European cooperation

IFU, IØ and IFV are members of the European Development Finance Institutions (EDFI). Besides the

Danish Funds, there are 14 other members. They are all bilateral finance institutions offering capital for the

development of the private sector in developing countries, and countries that are in a transition process

towards market economy. The objective of EDFI is to further cooperation and to safeguard common interests

in relation to the European Commission and its institutions, including the European Investment Bank (EIB).

EDFI website: www.edfi.be

HEAD OFFICE: Copenhagen - OFFICES: Beijing · Johannesburg · Moscow · Nairobi (expected to open in the summer of 2007) · New Delhi ADVISER OFFICES: Cape Town · Kiev · Warsaw - ADVISERS: Accra · Ankara · Bangkok · Beijing · Budapest · Cairo · Chennai · Copenhagen Dakar · Hanoi · Johannesburg · Kaliningrad · Kiev · Kuala Lumpur · Lagos · Lahore · L’viv · Maputo · Mexico City · Moscow · Mumbai Nairobi · New Delhi · Novosibirsk · Plovdiv · San José · St Petersburg · São Paulo · Shanghai · Suzhou · Washington D.C.

THE INDUSTRIALISATION

FUND FOR DEVELOPING

COUNTRIES (IFU)

Bremerholm 4

1069 Copenhagen K

Denmark

Tel: + 45 3363 7500

Fax: + 45 3332 2524

E-mail: [email protected]

www.ifu.dk

IFU-BEIJING

Room 1808,

China Travel Service Tower

No. 2, Beisanhuan

East Road

Beijing 100028

China

Tel: + 86 10 6460 9797

Fax: + 86 10 6460 9799


IFU-CAPE TOWN

(ADVISER OFFICE)

32 Belmont Avenue

Oranjezicht 8001

Cape Town

South Africa

Tel: +27 (0)21 465 5701

Fax: +27 (0)86 685 5602


IFU-JOHANNESBURG

Ground Floor, West Court

Sandown Village

16 Maude Street

Sandown 2196

P.O. Box 41934

Craighall 2024

Johannesburg, South Africa

Tel: + 27 11 783 1070

Fax: + 27 11 783 1071


IFU-NEW DELHI

SPWD Building, 2nd floor

14 A, Vishnu Digambar Marg

(Rouse Avenue Lane)

New Delhi – 110002

India

Tel: + 91 11 2321 7160

Fax: + 91 11 2321 7167


IFU Offices

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06

Contents

Executive Board

Legal Unit

Finn JønckManaging Director

Frank Norman LarsenDeputy Managing Director

Elsebeth H. RasmussenExecutive Assistant

Klaus FridorfHead of Communications

Project Development Department (PDD)

Torben HussDepartment Director

Jens BayerSenior Investment Manager

Kim GredstedSenior Investment Manager

Rami KhouryInvestment Manager

Morten MikkelsenInvestment Manager

Martin RømerInvestment Manager

Peter SchwalbeSenior Investment Manager

Kasper SvarrerInvestment Manager

Natalia SvejgaardInvestment Manager

Lone JespersenProject Secretary

Maria MontiProject Secretary

Rina WachsbergProject Secretary

Jens RixenSenior Legal Adviser

Investment Management Department (IMD)

Morten ChristiansenDepartment Director

Catherine Isabelle CaxInvestment Manager

Rena ChenInvestment Manager

Peer MunkholtSenior Investment Manager

Hans-Jørgen NyegaardSenior Investment Manager

Anders Paludan-MüllerSenior Investment Manager

Lis BluhmeProject Secretary

Birthe BræstrupProject Secretary

Csr Unit

Birgitte Bang NielsenHead of CSR

Michael Wedel SørensenEnvironmental Adviser

special Operations Department (sOD)

Svend J. HeinekeDepartment Director

Lisbeth ErlandsSenior Investment Manager

Max KruseSenior Investment Manager

Jens Lund SørensenSenior Investment Manager

Birgitte WaageProject Secretary

Linda WamslerProject Secretary

Corporate Administration Department (CAD)

Henrik JepsenDepartment Director

Lise Stougård ThomsenDepartment Secretary

Archives

Birgitte ChristensenChief Archivist

secretariat

Bjørn JakobsenHead of Secretariat

IT Unit

Michael Stig AndersenSystem Administrator (IT)

Søren HeilmannSenior SystemAdministrator (IT)

IFU Offices (reporting to IMD)

BEIJING - CHINA

Hong JiangChief Representative

BEIJING - CHINA

Le AnInvestment Manager

JOHANNESBURG - SOUTH AFRICA

Deepak MalikResident Representative


Tayengwa MasawiInvestment Manager

NAIROBI - KENYA1

Brian M. AndersenResident Representative

NAIROBI - KENYA1

Mainga MukandoInvestment Manager

NEW DELHI - INDIA

Deepa HingoraniResident Representative

NEW DELHI - INDIA

Rahul Dubey2

Investment Manager

NEW DELHI - INDIA

Manoj RalhanInvestment Manager

NEW DELHI - INDIA

Sanjay ChatterjiIT-Officer

NEW DELHI - INDIA

Rajat KanwalAssistant SystemAdministrator

NEW DELHI - INDIA

Manmohan MalhotraIT-Officer

CAPE TOWN - SOUTH AFRICA

Anders ÆrøeRegional Adviser

Advisers

GLOBAL

Helle BechgaardDenmark

GLOBAL

Uffe Bundgaard-JørgensenDenmark (Facilitator)

GLOBAL

Søren GuldborgDenmark

GLOBAL

Jørgen Dan JensenDenmark

GLOBAL

Henrik de JonquièresDenmark (Facilitator)

GLOBAL

Mikael OlufsenDenmark (Facilitator)

GLOBAL

Tonny Bech PedersenDenmark

GLOBAL

José M. RuisánchezWashington D.C., USA

GLOBAL

Hans SchiønnemannDenmark (HRD Adviser)

GLOBAL

Flemming SehestedDenmark

GLOBAL

Bendt StarupDenmark (Facilitator)

AFRICA

Kodjo AziagbéDakar, Senegal

AFRICA

Gareth CampbellJohannesburg,South Africa

AFRICA

Johnni P. KjelsgaardNairobi, Kenya

AFRICA

Jens Eric MollenbachLagos, Nigeria

AFRICA

Farouk NasserCairo, Egypt

AFRICA

Felix QuansarAccra, Ghana

AFRICA

Frank RoostMaputo, Mozambique

ASIA

Leo Emdal AlexandersenBangkok, Thailand

ASIA

Riyaz BokhariLahore, Pakistan

ASIA

Nalan CumcumAnkara, Turkey

ASIA

Nguyen Thanh HaHanoi, Vietnam

ASIA

Preben HjortlundHanoi, Vietnam

ASIA

Faridah Abdul KadirKuala Lumpur, Malaysia

ASIA

Patrik LundShanghai, China

ASIA

John MadsenKuala Lumpur, Malaysia

ASIA

Vipin MalikNew Delhi, India

ASIA

Pradeep MallickMumbai, India

ASIA

Peter RasmussenSuzhou, China(Facilitator)

ASIA

Sridhar SampathChennai (Madras), India

ASIA

Lucien WangBeijing, China

ASIA

Poul WeberBangkok, Thailand

LATIN AMERICA

Paul CardwellSan José, Costa Rica

LATIN AMERICA

Peter KilianMexico City, Mexico

LATIN AMERICA

Per E. L. OlsenSão Paulo, Brazil

Communications Finance Department (FIN)

Niels Gravgaard LaursenDepartment Director

Alice BrøndumPersonnel Administrator

Lone Bjørn HansenChief Accountant

Knud Lundgaard-KarlshøjFinance Officer

1) Expected to open in the summer of 2007.

2) Stationed at IFU Copenhagen until April 2008 in connection with SIMI studies.

Mission, vision & strategy 3

Legal mandate 3

Statement by the Management 4

Independent auditors’ report 5

Executive summary 6

Financial highlights 7

Management’s review 9

Accounting policies 19

Income statement 23

Balance sheet 24

Cash flow statement 26

Notes 27

Active project portfolio 36

Compliance with CSR 49

Management 51

List of abbreviations 54

IFU Adviser Office (reporting to IMD)

IFU ANNUAL REPORT �006 | � |

Mission, vision & strategy

IFU

MISSION:

To enhance global economic growth, development and more equitable

income distribution through increased global flow of socially and environmentally

responsible, productive investments making optimal use of comparative advantages.

VISION:

To contribute through information and advice in connection with co-investments

to enhance Danish enterprises’ active participation in the global flow of productive

investments towards developing and reform countries.

STRATEGY:

To become known, recognised and used by all relevant Danish enterprises as a

competent provider of know-how, experience and external financing as well as their

most preferred investment partner in developing and reform countries.

Legal mandate

“For the purpose of promoting economic

activity in developing countries, IFU has been

created to promote investments in these

countries in collaboration with Danish trade

and industry.“

The Act on International Development Cooperation,

The Danish Parliament, 7 June 1967.

New format for the annual report

IFU has decided to improve and extend the information

flow towards its key external stakeholder groups.

The traditional annual report will be in English and

contain all basic information such as management’s

review and financial review, information and statistics

on IFU’s success criteria, information on compliance

with Corporate Social Responsibility, external environ-

ment, Occupational Health and Safety, the complete

portfolio on active investments, etc.

To accommodate the need for more specific infor-

mation aimed at new and existing business partners,

organisations and the public, IFU will issue a profile

brochure in both English and Danish – IFU Perspec-

tive – in addition to its annual report. IFU Perspective

will focus on specific case studies and overall business

strategies in accordance with IFU’s political and ethical

guidelines. The brochure will also include highlights

from the annual results.

Information about all IFU’s investments, active as well

as exited, will be accessible on IFU’s website www.ifu.dk

and updated on a regular basis.

| � | IFU ANNUAL REPORT �006

The Executive and Supervisory Boards have presented the annual report for the

year ended �1 December �006. The annual report was discussed and adopted on

today’s date.

The annual report has been presented in accordance with the Danish Financial

Statements Act governing reporting class C enterprises (large).

We consider the accounting policies used appropriate and the accounting

estimates made reasonable. To the best of our belief, the annual report includes

the information which is relevant for an assessment of the Fund’s financial

position. Against this background, it is our opinion that the annual report gives a

true and fair view of the Fund’s assets and liabilities, financial position, results of

operations and cash flows for the year ended �1 December �006.

Copenhagen, 22 February 2007

Executive Board:Finn Jønck, Managing Director

Frank Norman Larsen, Deputy Managing Director

Supervisory Board:Johannes Poulsen, Chairman

Michael Rasmussen, Deputy Chairman

Lars Andersen

Sigurd Ø. Andersen

Elsebeth Budolfsen

Betina Hagerup

Susanne Hyldelund

Ib Petersen

Agnete Raaschou-Nielsen

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statement by the Managementon the annual report

StatEmENt


independent auditors’ report

aUdItorS’ rEport

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To the Supervisory Board of the Industrialisation Fund

for Developing Countries (IFU)

We have audited the annual report of IFU for the finan-

cial year ended �1 December �006, which comprises the

statement of the Supervisory and Executive Boards on

the annual report, the Management’s review, a summary

of significant accounting policies, the income statement,

balance sheet, statement of changes in equity, cash flow

statement for the year then ended, and notes including

table showing the active projects in relation to which

IFU has entered into investment agreements. The annual

report has been prepared in accordance with the Danish

Financial Statements Act.

The Supervisory and Executive Boards’ responsibility

for the annual report

The Supervisory and Executive Boards are responsible

for the preparation and fair presentation of this annual

report in accordance with the Danish Financial State-

ments Act. This responsibility includes: designing, im-

plementing and maintaining internal control relevant

to the preparation and fair presentation of an annual

report that is free from material misstatement, whether

due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates

that are reasonable in the circumstances.

Auditor’s responsibility and basis of opinion

Our responsibility is to express an opinion on this annual

report based on our audit. We conducted our audit in ac-

cordance with Danish Standards on Auditing and agree-

ment between the Minister for Foreign Affairs and Auditor

General regarding the audit of IFU. Those standards require

that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance whether

the annual report is free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the an-

nual report. The procedures selected depend on the au-

ditors’ judgement, including the assessment of the risks

of material misstatement of the annual report, whether

due to fraud or error. In making those risk assessments,

the auditors consider internal control relevant to the

entity’s preparation and fair presentation of the annual

report in order to design audit procedures that are ap-

propriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the en-

tity’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the

Supervisory and Executive Boards, as well as evaluating

the overall presentation of the annual report.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

audit opinion.

The audit did not result in any qualification.

Opinion

In our opinion, the annual report gives a true and fair

view of the Fund’s financial position at �1 December

�006 and of the results of its operations and its cash

flows for the financial year then ended in accordance

with the Danish Financial Statements Act.

Copenhagen, 22 February 2007

Ernst & Young

Statsautoriseret Revisionsaktieselskab

Svend Duelund Jensen

State Authorised Public Accountant

Henrik Barner Christiansen

State Authorised Public Accountant

| 6 | IFU ANNUAL REPORT �006

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executive summary

• �006 showed a record-high number of new projects - a total of ��

- expected to employ nearly 6,000 persons

• IFU also provided additional financing to 1� ongoing projects in �006

• As a result of an intensified effort by IFU, �006 also showed a record-high

number of new projects in Africa - a total of 1�

• The favourable global market conditions in �006 had a positive effect

on most project companies and IFU’s profit

• Altogether, �006 yielded a record profit for IFU of DKK ��m

• Approximately half of the profit is due to an increase in the valuation of the

Fund’s existing portfolio, and future results may be subject to considerable volatility

• Continued focus on Corporate Social Responsibility in �006 following the entry

into force of the new policy as of 1 January �006

• IFU has decided to improve and extend the information flow by publishing a series of

new publications. As a consequence, the contents of the traditional annual report for

�006 will be more focused

• With effect from 1 August �006 Mr. Finn Jønck became new managing director

of IFU succeeding Mr. Sven Riskær


HIgHLIgHtS

Financial highlights

INCOME STATEMENT

Gross contribution from projects (loss)

Operating income (loss)

Net income for the year

BALANCE SHEET AT �1 DECEMBER

Share capital investment in projects at cost

Project loans at cost

Total investment in projects at cost

Accumulated value adjustments

Investments in projects, net1

Cash and bonds

Repaid capital/paid-in capital during the year

Total equity capital

Total balance

ADDITIONAL DATA

New projects contracted (no.)

Portfolio of projects (no.)

Investments contracted

Investments disbursed

KEY RATIOS

Gross contribution from projects/Average investment in

projects - value adjusted

Operating income/Average total equity capital

Net income for the year/Average total equity capital

Total equity capital/Total assets

Accumulated value adjustments/Investment in projects at cost

Average number of full-time employees

1) The financial highlights have been adjusted for �00� - �00� as a consequence of the changes in presentation effected in �00�.

Environmental Investment Ratio (Range: 0 - 100%)

Total fulfilment of Fund’s success criteria (Range: �� - 100%)*

Development impact

Partner mobilisation

Sustainability and profitability of projects

Fund’s operational targets

* A minor correction to the figure for �00� has been made in respect of total fulfilment of the Fund’s success criteria.

�) Weighted by invested amounts (see text on Success Criteria and Environmental Investment Ratio on page 1�).

developmental and environmental highlights - ex ante2

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IFU ANNUAL REPORT �006 | 9 |

>

Management’s review

maNagEmENt’S rEvIEw

main activities

�006 was in many ways an exceptional year for IFU with

the second highest investment level ever of approxi-

mately DKK �00m and contracted investments for �� new

project companies, which is a higher number than ever

before. At �6% the return on IFU’s project portfolio more

than doubled in �006 compared to �00�, leading to a

record profit of DKK ��m. The figure for expected direct

employment in the �� new projects was about �,900. IFU

made additional financing in 1� ongoing projects em-

ploying about �,��0 people.

Particularly in Africa IFU’s investment activities were at a

very high level in �006, which is in line with IFU’s focus

on the poorer countries. More than one third of all new

projects were established in Africa, and in terms of in-

vested amounts almost half of all IFU’s investments were

in Africa. IFU invested almost DKK �00m in 1� new project

companies. This is a historically high number. Further-

more, IFU made a number of supplementary investments

in its existing Africa portfolio amounting to DKK �8m dis-

tributed on five project companies.

IFU’s net result for �006 was marked by positive global

market conditions. In recent years many developing

countries, including Sub-Saharan African countries, have

had growth rates which exceed the ones normally seen

in the high-income countries, and many project compa-

nies have been able to take advantage of the favourable

market conditions. This again has had a positive effect

on the valuation of the project companies and thereby

on IFU’s profit.

Many of the project companies have managed to es-

tablish viable business concepts that can survive both

global competition and local challenges and thus con-

tribute to an overall positive social and economic devel-

opment in the countries where IFU invests.

Legal mandate

IFU’s legal mandate is to promote economic activity in

developing countries by promoting investments in these

countries in collaboration with Danish trade and indus-

try. IFU is operating on commercial conditions and is

self-financing. IFU was established by law in June 196�

as part of the Act on International Development Coop-

eration, the overall purpose of which is to promote eco-

nomic and social progress in developing countries.

IFU was established as a legally independent, self-gov-

erning entity, limited in its liability to the extent of its

net worth only. The Danish Minister for Development

Cooperation appoints the Supervisory Board and the

Managing Director.

IFU provides share capital participation, loans and guar-

antees on commercial terms for investments in produc-

tion or service companies in developing countries. The

government decided in �00�/06 that only countries with

a per capita income below USD �,�� (�00�) plus South

Main features at 31 December 2006

Number EURm*)DKKm

��.0��.9Net income �006

�66.11,98�.�Total equity capital at �1.1�.�006

Investments contracted during �006 66.8

Contracted investments in projects since establish-ment (196�-�006),of which disbursed (196�-�006) payable at �1.1�.�006

�8�

Number of countries in which IFU has invested (196�-�006) ��

*) Exchange rate: EUR 100 = DKK ��.6

�8 �98.�

6,��.6

�,0��.0��8.�

90�.�

6��.061.�


Africa, Botswana and Namibia would be eligible for IFU financ-

ing. The Fund’s revenues comprise interest, dividends and

profit from shares.

As a pillar supporting IFU’s investment activities the Fund has

drawn up a Corporate Social Responsibility (CSR) policy, which

comprises high environmental standards and high standards

for Occupational Health and Safety (OHS) as well as for code

of conduct.

By collaborating with IFU, the partners, in addition to financ-

ing, gain access to IFU’s knowledge from investments in more

than ��0 projects in �� countries since 196�, and to support

from an extensive network of advisers and financial institu-

tions. Both in the start-up phase and during the operation

of the projects IFU is actively involved in the projects, e.g. by

having a seat on the boards of the projects.

IFU will continuously strive to further increase its invest-

ments in the poor countries with particular focus on Africa,

and at the same time make a targeted effort to improve the

quality of the project portfolio in order to remain profitable

and sustainable in its own right.

To attain this target IFU is taking the following initiatives:

• Closer cooperation with publicly financed private

sector instruments, e.g. Danida’s Private Sector

Development programme (from �006 replaced by the Busi-

ness-to-Business (B-�-B) programme) and the GoGlobal

initiative, see below on page 1�.

• Opening a regional office in Nairobi, Kenya in �00�.

• An increase in the number of advisers in the poor

developing countries with capacity to assist IFU in

identifying, appraising and monitoring projects.

• A comprehensive package of support schemes for Small

and Medium-sized Enterprises (SME) in all phases of a

project from the first idea to the final operation of a

project company.

• Development of new kinds of partnerships with

private companies and investors.

Among the critical regions, Africa stands out as the one most

in need of a strong and active strategy to overcome the many

challenges and negative perceptions associated with invest-

ments on the continent, e.g. HIV/AIDS, corruption and inef-

ficient infrastructure. On the basis of IFU’s previous experi-

ence with investments in Africa, the Fund constantly tries to

identify new project opportunities in Africa, and at the same

time identify Danish companies with a specific or potential

interest in Africa.

Even though the focus on Africa is important to IFU, the Fund

will also continue to be active in developing countries in oth-

er regions fulfilling the per capita income limit.

development in

IFU’s area of activity during 2006

New managing director of IFU

On 1 August �006 Finn Jønck became the new managing direc-

tor of IFU succeeding Sven Riskær, who had been the managing

director since 19�8. Finn Jønck comes from the Danish Ministry

of Foreign Affairs, where he has been working most of the time

since graduating from the University of Copenhagen as M.Sc.

in Economics. During the Uruguay Trade Round he was special

adviser on trade policy to the Ministry. His most recent position

was as Head of Development Policy. For a three-year period,

�000 to �00�, Finn Jønck was Executive Director in the World

Bank Group in Washington representing the Nordic and Baltic

countries on the Board of the Bank and IFC.

Investments in 2006 – an overview

In �006 IFU experienced a continued high level of investment

activity with contracted investments in �� new projects of a

total amount of DKK �90.�m. Additional financing in 1� on-

going projects amounted to DKK 10�.8m. IFU’s investments in

new projects went to 1� countries, and the average amount

invested in new projects was DKK 11.�m.

��% of the new investments were in the form of share capital

and project loans with equity features.

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In �006 three projects were transferred from IØ to IFU at mar-

ket value, in total DKK 9�m, due to the change in geographical

areas for the two funds. These three projects are not included

in the figures for new investments in �006 for IFU, but they

appear on the list of active projects.

africa focus

From the middle of the 1980s and up to �000, IFU’s invest-

ments in Africa have more than doubled from an average of

four new projects a year to an average of nearly nine projects

a year. After a temporary fall in the period �001-0�, Africa

became a focal point for IFU again in �006 with a record high

number of investments in 1� new projects. On the basis of

previous positive experience and as part of a more diversified

policy, the Fund invested in two financing facilities related to

Africa in �006. One of the facilities may also finance projects

in ACP countries outside Africa. These facilities will create new

possibilities for financing projects in Africa.

IFU became shareholder in EMP Africa Fund II (AF II) by sub-

scribing for shares to an amount of USD 10m together with the

Danish Lønmodtagernes Dyrtidsfond (LD). AF II is the succes-

sor fund to the Africa Infrastructure Fund (AIF I), in which IFU

is a shareholder together with IFC, AIG, Africa Development

Bank, EIB and six members of the European Development Fi-

nance Institutions (EDFI). The scope of AF II will encompass

mainly natural resources, agribusiness, transport, financial

services, tourism and health care.

The investments in these funds are expected to generate a

significant number of jobs in the projects in which the funds

invest.

In �006 IFU also signed an agreement concerning an invest-

ment of EUR �m in European Finance Partners (EFP). EFP was

established by EIB with a number of IFU’s sister organisations

in Europe with the purpose of making investments in the ACP

countries – primarily in Africa.

IFU is presently investigating the possibilities of becoming en-

gaged in other African funds as part of its Africa strategy. IFU

has previously invested in two funds in Africa, the Acacia Fund

in East Africa and West Africa Growth Fund in West Africa.

asian activities

IFU continues to experience a high investment demand from

Danish companies in Asia. Especially in India, Vietnam and

China the investment activity has been high; in India and

China because of the continuously high market growth, and

in Vietnam (and also Bangladesh) the cooperation with Da-

nida’s Business-to-Business programme has resulted in new

project activity, though mainly in smaller projects.

In �006 China continued to be an important country for Dan-

ish companies and investors. A total of six new projects were

established in China with IFU’s participation. Among these

IFU invested DKK 1�.�m in a dairy project with Arla in Western

China and DKK �0m in a project with Vestas to produce equip-

ment for renewable energy.

IFU expects to be able to sustain and maintain a satisfactory

activity level in China in the years to come – and at the same

time accommodate the Danish government’s decision on lim-

iting IFU’s total engagement in China.

Number of investments in new projects ��

1�Number of additional financing of ongoing projects

EUR ��.�m

EUR 69�.�m

DKK �90.�m

DKK �,18�.�m

NEW PROJECTSIFU’s contacted investmentsExpected total investments in projects

Investments in new and ongoing projects EUR 66.8m DKK �98.�m

Disbursement of share capital and loans

Paid-in from projects EUR ��.�m DKK �6�.�m

Expected direct employment in the new projects �,9�8 jobs

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DKK ��1.�m EUR �9.8m

| 1� | IFU ANNUAL REPORT �006

��

�6

��

�8

�9

�0

�1

��

��

��

��

�6

��

�8

1�

1�

1,610

�18

��

�1

1�

1�

1�9

�1�

16

1�

��

��0

�,��

1.9

1.1

�9.8

�.�

1�.0

0.6

�.9

1.6

1.1

�1.8

0.�

0.�

�.6

1.�

10�.8

�98.�

1.9

1.1

�9.8

0.6

�.9

1.6

0.�

0.�

1.�

��.�

�11.�

�.�

1�.0

1.1

�1.8

�.6

6�.�

18�.0

project name country

Bio Nutrientes do Brasil

Kosan Crisplant Cameroon

Singa Banana Plantations

Al Quseir Hotel Company

Sinai White Portl. Cement

Danish Steel Cluster

Indan Energy

Emunio Manufacturing Co.

Roxul Asia

Carlsberg Serbia

Styromatic Thailand

K�-Informatics (U)

VHC Fabricius

Viking Vietnam

Total***

Grand Total***

Africa (Regional)

Africa (Regional)

Armenia

Bangladesh

China

China

China

China

China

China

Congo

Egypt

Egypt

India

India

India

India

India

Kenya

Mozambique

Nicaragua

Nicaragua

Panama

South Africa

South Africa

Tanzania

Thailand

Thailand

Uganda

Uruguay

Vietnam

Vietnam

Vietnam

Zambia

iFu’s contracted investments in dKKm

NEW PROJECTS

ADDITIONAL FINANCING OF ONGOING PROJECTS

actual direct employment (persons)****

shares* loans** total

1

�

�

�

�

6

�

8

9

10

11

1�

1�

1�

1�

16

1�

18

19

�0

�1

��

��

��

��

�6

��

�8

�9

�0

�1

��

��

��

Africa Infrastr. Fund II

EFP

Lusakert Biogas Plant

Comfort Wear Int.

Brdr. Hartmann (Suzhou)

Dolle (Suzhou)

GPV Medical Equipment

Gleco Kunfeng

Mengniu Arla Dairy Prod.

Vestas Wind Turbine Equip.

CIB

Int. Fruit Production

Orana Egypt

Aleksika India

Carlsberg India

Elsteel Modular Products

Shetron Metropak

Sunico India

KBC (K)

First Natural Choice

Protena

T� Nicaragua

Rohde Nielsen Panama

CareWorks South Africa

Lafron Plating

Emunio Tanzania

Feldborg Thailand

NewCo Thailand Co.

Biyinzika

Ontur International

An Phu Design Co.

Reproflex Vietnam

TAC Paritas

Munkumpo Farm

Total***

Brazil

Cameroon

Cameroon

Egypt

Egypt

India

India

Malaysia

Malaysia

Serbia & Montenegro

Thailand

Uganda

Vietnam

Vietnam

61.�

0.0

1.�

�.0

1.8

�.�

0.8

1.�

�.�

�.�

9.6

�.�

0.8

�.1

0.1

1�.0

1�1.�

��.�

1.6

1.8

�.�

�.6

1�.�

�0.0

�0.0

�.0

�.�

0.8

1�.1

�.8

�6.8

1.�

�.�

6.0

1.6

1.0

8.6

1.1

0.�

�.9

�68.�

61.�

��.�

1.�

1.6

6.�

�.�

�.6

1.8

1�.�

�0.0

�0.0

�.�

0.8

1.�

�.�

�.�

�.0

9.6

�.�

0.8

1�.1

10.�

�6.8

1.�

�.�

6.0

�.�

�.1

1.0

8.6

0.1

1.1

0.�

18.8

�90.�

1�

�

9

��8

�00

1�0

89

��0

�80

��0

�,110

0

��

�0

1�6

��0

6

186

��

�00

�0

��0

1�0

��

��

��

��

��

��

168

18

�0

��

��

�,9�8

*) incl. overrun commitments **) incl. guarantees ***) totals may not add up due to rounding up ****) for definitions reference is made to page �6

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expected employment (persons)****

investments contracted in 2006

IFU ANNUAL REPORT �006 | 1� |

CSr policy

IFU promotes investments to support a sustainable develop-

ment in the countries where the Fund invests.

It is therefore IFU’s ambition to make the ongoing work con-

cerning Corporate Social Responsibility (CSR) a future bench

marker for all project companies in which IFU invests.

The aim of IFU’s operational CSR guidelines is to ensure that the

project companies comply with environmental and health and

safety legislation, and that they adhere to international hu-

man rights and business ethics conventions and declarations.

In addition, the CSR policy urges the project companies to keep

developing and improving their performance and to enter into

dialogue with stakeholders in the local communities.

The work concerning CSR issues must be developed as an inte-

gral part of operations and management of the project compa-

ny, and should be sustainable, also when IFU exits the project

company, which normally takes place after six to eight years.

CSR-specific initiatives in 2006

In November �00� IFU adopted a new and comprehensive CSR

policy. �006 was therefore a year with focus on implementing

the CSR policy in the daily practice of appraising and monitor-

ing investments, e.g.:

• Communicating the CSR policy, procedures and guidelines

to partners and project companies.

• Implementing the Human Rights Quick Check tool, which has

been developed by the Danish Institute for Human Rights

together with the Confederation of Danish Industries (Dansk

Industri) and IFU. The tool is an appraisal tool used in all

new projects with effect from January �006. IFC has provided

funding to develop a web-based version of the Institute’s

Human Rights Compliance Assessment tool for businesses.

Stakeholder involvement

The Fund established a CSR Advisory Board with Kim Carstensen,

Chief Executive Officer, WWF, Morten Kjærum, Executive Direc-

tor, Danish Institute for Human Rights, Jacob Simonsen, Direc-

tor, UNDP, and Anna Lise Mortensen, Vice President, Novozymes.

The main task of the Advisory Board is to act as sparring part-

ner and challenge IFU to further develop and improve its CSR

policies and procedures.

CSR project monitoring group

In relation to the tropical forest project in Congo, the Congolaise

Industrielle des Bois (CIB), IFU established a monitoring group con-

sisting of representatives from WWF, IWIGIA (International Work

Group for Indigenous Affairs) and Transparency International. An

independent tropical forestry expert is also part of the group. The

main task of the monitoring group is to review all available CSR-

related information on the project in order to identify key areas

and issues, and provide IFU with advice and recommendations.

Anti-corruption policy

IFU has prepared a policy paper for anti-corruption contain-

ing special guidelines for anti-corruption. The paper presents

– in a comprehensive manner – the policy and the practical

guidelines as they are already part of the standard legal agree-

ments. The documents can be found on www.ifu.dk.

Public access to environmental information

IFU treats all environmental data received from its companies

as confidential. However, in �006 the Ombudsman of Parlia-

ment informed IFU that he was of the opinion that IFU was not

exempt from the initial “Act on Public Access to Environmental

Information” of 199�. Accordingly the Fund will comply with

the Ombudsman’s interpretation. Any request to gain access

to documents received by IFU will be subjected to close scru-

tiny in accordance with the Act.

goglobal initiative

During �006 the collaboration within the GoGobal initiative

was strengthened further. The GoGlobal initiative comprises

collaboration between IFU, Eksport Kredit Fonden (The Export

Credit Fund), Danish International Development Assistance

(Danida) and the Danish Trade Council.

All these institutions offer services and financing to Danish

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| 1� | IFU ANNUAL REPORT �006

enterprises operating outside Denmark, including develop-

ing countries. The purpose of the collaboration is to make it

easier for Danish companies to make use of the various insti-

tutions by enabling the employees to become better at ren-

dering advice on investment possibilities and opportunities

for various kinds of partnerships. The collaboration between

the institutions aims at providing more specific information

activities to companies, which may display an interest, and

offering supplementary education to the employees. The

GoGlobal collaboration is reviewed on a regular basis.

Further information about the GoGlobal initiative can be

found on www.GoGlobal.dk.

IFU’s success criteria

The success criteria imply that each project must be appraised

on the basis of four general categories under the following

headlines:

• Development impact – e.g. job creation

and transfer of knowledge.

• Partner mobilisation – includes measuring

IFU’s contribution to mobilisation of Danish partners.

• Sustainability and profitability of projects – where,

for example, the viability of the projects is assessed.

• Efficiency and effectiveness of Fund operation.

IFU has developed a system which endeavours to quantify

each of the four categories making up the success criteria,

and which has made it possible to aggregate them all to form

one “success” figure for each project.

The weight of the development impact is �0%, while the

weight of the remaining three elements is distributed as fol-

lows: partner mobilisation �0%, sustainability and profitabil-

ity of projects �0%, and efficiency and effectiveness of Fund

operation 10%.

An overall ratio above 80% is considered to be excellent; a

ratio between 60 and 80% is considered to be good. A ratio in

the range of �0 to 60% is considered to be fair, while a ratio

below �0% is considered to be poor.

The Environmental Investment Ratio, which is part of the suc-

cess criteria, is an expression of the percentage of the Fund’s

investment in a project, which can be considered an invest-

ment in improved environment or Occupational Health and

Safety (OHS).

Detailed information about IFU’s success criteria can be found

on www.ifu.dk.

Knowledge and human resources

Knowledge is one of IFU’s major assets and is embedded in

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the staff in Copenhagen, the offices abroad and within the

network of advisers.

The Fund places emphasis on continuously maintaining and

developing its staff and adjusting the framework, so that the

required skills can be utilised in the day-to-day work to the

benefit of projects with IFU participation.

Consequently, a number of seminars were organised in �006

to update staff and advisers on current issues. As an exam-

ple, two adviser seminars were held in Copenhagen, one for

IFU advisers living outside Denmark and one for IFU advisers

living in Denmark.

Offices abroad and adviser network

Specific country experience is embedded in the offices abroad

and in the adviser network. The main task of the offices and ad-

visers is to assist in project implementation and to promote and

monitor projects by assisting with their thorough knowledge of

local markets, authorities, legislation, businesses, etc.

IFU has regional offices in Beijing/China, New Delhi/India and

Johannesburg/South Africa. In addition to the three regional of-

fices, IFU has an adviser office in Cape Town/South Africa. In May

�00� IFU plans to open a regional office in Nairobi, Kenya.

At year-end �006 �� advisers in 18 countries were servicing

IFU.

Facts about the staff

IFU is the fund manager for its sister funds, IØ and IFV. The

average number of employees in �006 was ��. At year-end the

distribution of employees was as follows:

�1% Female 8�% Employed at the head office

�9% Male 18% Employed outside Denmark

review by the

National audit office of denmark

In �006 the National Audit Office of Denmark initiated a re-

view of IFU (and IØ) with the purpose of making an assess-

ment of IFU’s efficiency. Staff from the National Audit Office

visited a number of IFU projects in Western Africa and Viet-

nam (and IØ projects in Russia). The review is expected to be

completed in May �00�.

Financial review 2006

With a record profit of DKK ��m in �006, IFU continued to show

solid financial results. The income was far better than what was

expected a year ago and followed a profit of DKK 1��m in �00�.

The result was primarily generated by contributions from IFU’s

portfolio of share capital investments. This reflects a positive

development in many of the project companies, which have

been able to take advantage of the expanding economy in

most developing countries in recent years.

Total contribution from IFU’s primary project-related activi-

ties, including contributions from loans and other contribu-

tions from projects, was DKK �6�m against DKK 186m in �00�.

As mentioned, share capital investments were the main driver

of the result with a total contribution of DKK ��m. The figure

for �00� was DKK ��m. Dividends and divestment of invest-

ments contributed a total of DKK 1��m, and value adjust-

ments on investments during the year, still held at year–end,

contributed DKK 199m. Net cash flow in �006 related to share

capital was DKK �1m after disbursements of DKK 1��m.

Project loans contributed DKK 80m in �006, which was a large

improvement in relation to the figure for �00�, DKK (��)m.

This was mainly due to a positive development in the as-

sessed fair value of IFU’s loans, as value adjustments other

than exchange rate adjustments contributed DKK ��m com-

pared to DKK (9�)m in �00�. Net cash flow related to loans

was negative in �006 by DKK (��)m due to large disburse-

ments of new loans amounting to DKK 19�m.

IFU’s part of the overall operating expenses for �006 cover-

ing the three funds managed by IFU, i.e. IFU, the Investment

Fund for Central and Eastern Europe (IØ) and the Investment

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Fund for Emerging Markets (IFV), was DKK ��m compared to

DKK �8m in �00�.

The overall net expenses were DKK �6m compared to DKK

68m in �00�. The increase reflects higher expenses related

to CSR, new initiatives aimed at expanding IFU’s activities

in the poorer countries and a strengthened communication

platform. Furthermore, the figure for �006 includes one-

time expenses relating to the change of managing director

in �006.

Also, IFU’s part of the overall expenses rose from �6% in �00�

to 69% in �006. This increase reflects a higher activity level

at IFU combined with a reduced activity level at IØ in �006. As

of �006 IØ can only make new investments in three countries

and is gradually divesting its portfolio in the countries where

it no longer invests. 1� countries were transferred from IØ to

IFU in �006. As a consequence of the reduced geographical

area for new IØ investments and as IØ continues to divest its

portfolio, IFU’s share of the overall expenses is expected to

continue to rise in the coming years.

As previously mentioned IFU’s new focus on the poorer coun-

tries will continue to require targeted initiatives, and com-

bined with growing requirements in relation to CSR, it is ex-

pected that IFU’s operating expenses per amount invested will

rise in the coming years. This will be further accentuated if an

increasing part of IFU’s future investments consists of smaller

investments made in partnership with SMEs.

Financial income, net of financial expenses was DKK 11m com-

pared to DKK 6m in �00�.

risk management

IFU invests in projects located in developing countries, where

political and economic conditions may be turbulent, and fur-

ther, the commercial risk in the projects is often high.

As a consequence of this exposure and in particular as IFU

measures its investments at estimated fair value, in accord-

ance with the prevailing accounting principles of the Dan-

ish Financial Statements Act, IFU’s net result may show large

fluctuations – positive and negative – from year to year due

to value adjustments on the investments.

To minimise the overall risk in IFU’s investment portfolio, a

set of risk policies have been implemented in the investment

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policy. These policies include guidelines for project, partner

and country risk exposure as well as guidelines for managing

the direct financial risk.

Project risk is managed by the indicative limit for IFU’s partici-

pation in a single project, which is DKK �0m, whereas Part-

ner risk is limited through the indicative limit that a partner

(at group level) should not account for more than �0% of the

Fund’s total project engagement (the sum of outstanding in-

vestments at cost, remaining commitments and binding com-

mitments). Furthermore, as a guideline, the total engagement

in a single country should normally not exceed �0% of the

Fund’s total project engagement.

Financial risk

At the end of �006 IFU’s total outstanding on loans denomi-

nated in USD amounted to USD �0.�m (DKK ��0m at end of year

exchange rates), and the net result is therefore sensitive to

fluctuations in the USD/DKK exchange rate. A hedging policy

is implemented in order to reduce this sensitivity. The policy

for hedging states that the exposure in USD must not exceed

1�% of the Fund’s equity capital plus value adjustments, and

that the hedged share of the total USD exposure should nor-

mally not exceed ��%. IFU only hedges project loans with an

estimated low risk of default. At the end of �006 ��% of the

USD exposure was hedged. At the end of �006 IFU’s exposure

to currencies other than USD, DKK and EUR was very low at 1%

of the loan portfolio at cost.

��% of IFU’s total outstanding investment at cost at year-end

was placed in project loans, including loans with equity fea-

tures, of which a large part is based on IFU’s standard variable

interest terms, CIBOR/LIBOR, plus a risk premium dependent

on the Fund’s assessment of the projects’ risk profile. An in-

crease in the CIBOR/LIBOR interest rates will therefore have a

positive effect on IFU’s interest income from project loans.

Liquidity is administered with the aim of always securing a

positive cash position. A credit facility shared with IØ of DKK

�00m is in place to cover unexpected negative short-term

fluctuations in cash flows.

Distribution of project engagement at 31 December 2006

– ten largest portfolios

Note: Malaysia, Brazil, Turkey and Panama are no longer eligible for IFU investments.

Events after the balance sheet date

No events materially affecting the financial position of IFU

have taken place after the balance sheet date.

outlook for 2007

In �00� IFU will continue its focus on the poorer countries and

especially on Africa. IFU expects to enter into agreements for

approximately �0 new projects in �00�. If additional finan-

cing to existing projects is included, the total IFU investment

is expected to amount to DKK ��0m.

On the basis of IFU’s current projections for investments and

disinvestments (share sales and loan repayments), the Fund

also expects a positive result for �00�, though at a lower level

than what was realised in �006.

The expected net result is subject to considerable uncer-

tainty, as it is difficult by nature to predict the development

in fair value of both new investments and investments in

the existing portfolio, including the effects of exchange rate

fluctuations.

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Country %

China 19.�

India 10.1

Malaysia 8.1

Egypt �.�

Serbia & Montenegro �.1

Nigeria �.�

Brazil �.�

Vietnam �.�

Turkey �.0

Panama �.6


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>

This annual report has been prepared in accordance with

the provisions of the Danish Financial Statements Act

governing reporting class C enterprises (large).

accounting policies in general

The accounting principles applied are the same as those

for last year.

Presentation and classification

IFU’s income statement and balance sheet vary from the

standard tables of the Danish Financial Statements Act,

because they are presented on the basis of IFU’s spe-

cial character as an investment fund (long-term invest-

ments), and with a view to the best possible clarity of

information to the reader of the accounts. The deviation

is in concurrence with section �� (�) of the Danish Finan-

cial Statements Act.

In order to both emphasise and clarify the different

kinds of contributions from IFU’s project activities, the

income statement has been changed only to show ag-

gregated contributions from share capital investments,

project loans and other contributions.

The various contributions are further specified in notes

1 to �.

Comparative figures for �00� have been aggregated in

the same way.

Changes in the format have no effect on the result.

Recognition and measurement

Assets are recognised in the balance sheet when it is prob-

able that future economic benefits will flow to the Fund,

and provided that the value of the assets can be measured

reliably.

Liabilities are recognised in the balance sheet when the

Fund has a legal or constructive obligation as a result of

a prior event, and it is probable that future economic

benefits will flow out of the Fund, and the value of the

liabilities can be measured reliably.

On initial recognition assets and liabilities are measured

at cost. Adjustment subsequent to initial recognition is

effected as described below for each item.

Information brought to IFU’s attention before the time

of finalising the presentation of the annual report, and

which confirms or invalidates affairs and conditions ex-

isting at the balance sheet date, is considered at recogni-

tion and measurement.

Income other than value adjustments is recognised in

the income statement when earned, just as costs are

recognised by the amounts attributable to this financial

year. Value adjustments of financial assets and liabilities

are recognised in the income statement as value adjust-

ments.

Foreign currency adjustment

Foreign currency transactions are initially recognised in

DKK using the exchange rate at the transaction date.

Loans, receivables, payables and other monetary items

denominated in foreign currencies, which have not

been settled at the balance sheet date, are converted

into DKK using the exchange rate at the balance sheet

date. All exchange rate adjustments, including those

that arise at the payment date, are recognised in the in-

come statement as value adjustments, financial income

or financial expenses, depending on their nature.

Derivative financial instruments

IFU has established a set of criteria for entering into for-

ward exchange contracts and cross currency swaps (de-

aCCoUNtINg poLICIES

accounting policies

| �0 | IFU ANNUAL REPORT �006

rivative financial instruments) to hedge future transactions

concerning selected foreign currency loans and receivables

from sale of shares (fair value hedge).

On initial recognition in the balance sheet, derivative financial

instruments are measured at cost and subsequently adjusted

to fair value. Derivative financial instruments are recognised

under other receivables or other payables.

Changes in the fair value of derivative financial instruments

are recognised in the income statement as either “Contribu-

tion from project loans and guarantees”, if related to hedg-

ing of project loans, or “Other contributions from projects”, if

related to hedging of receivables from sale of shares.

Income statement

Contribution from share capital investments

Contributions from share capital investments include declared

dividends (after tax), contributions from divested share capi-

tal investments and value adjustments in relation to the out-

standing portfolio at year-end.

Contribution from project loans and guarantees

Contributions from project loans and guarantees include in-

voiced interest, value adjustments, including exchange rate

adjustments in relation to the portfolio, the effect of de-

rivatives and other value adjustments, principally of interest

receivables.

Other contributions from projects

Other contributions from projects include value adjustments,

including exchange rate adjustments in relation to receiv-

ables, the effect of derivatives and interest from receivables.

Operating expenses, net

IFU manages the administration and accounting of altogether

three funds. This includes IFU, the Investment Fund for Central

and Eastern Europe (IØ) and the Investment Fund for Emerging

Markets (IFV). The total operating expenses incurred by IFU, net

of income related to operating activities, are divided at year-

end between IFU, IØ and IFV according to an activity dependent

distribution key.

Financial income, net

Financial income, net comprises interest income on cash and

bonds, realised and unrealised capital gains and losses on

bonds, interest expenses, exchange rate adjustments on cash

and bank charges.

Balance sheet

Investments in projects – general

Investments are reported at the estimated fair value as at the

reporting date. Fair value is the amount for which an asset

could be exchanged between knowledgeable, willing parties

in an arm’s length transaction.

When estimating the fair value of an investment, IFU seeks to

use a methodology which is appropriate in light of the na-

ture, facts and circumstances relating to the investment and

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IFU ANNUAL REPORT �006 | �1 |

its materiality in the context of the total investment port-

folio. Methodologies are applied consistently from period to

period, except when a change would result in a better esti-

mation of fair value.

Because of the uncertainties inherent in estimating fair value

for unquoted investments, in particular when located in de-

veloping countries, a degree of caution is applied when exer-

cising judgement and making the necessary estimates.

In �006 IFU reviewed and adjusted the procedures and models

for assessing the fair value of the investments made by IFU.

For all investments the value determined by using the methods

described below will be adjusted, if considered necessary and

appropriate, by taking the following factors into account:

• The financial status and most recent results of

and expectations for the project company.

• Risk of remittance, if any.

• Specific circumstances relating to the partners,

project, country, region and/or sector.

• Tax issues.

Share capital investment in projects, net

Share capital investments in project companies are measured

at fair value, i.e. net of or including value adjustments rela-

tive to cost in DKK.

If the Fund receives a binding offer in writing during the 1�-

month period prior to the reporting date, this offer is used as

a starting point for the valuation of the investment.

Quoted share capital investments

All quoted share capital investments are valued according to

the most recent market price listed on or before the reporting

date. If the market is not considered liquid, i.e. that a sale

of the investment may cause a significant movement in the

stock price, an illiquidity discount is applied.

Unquoted share capital investments

Investments are valued at cost until IFU receives audited ac-

counts covering a period of at least two years of operational

activities of the project company following the first disburse-

ment by IFU.

Unquoted share capital investments having met the twoyear

operational criteria (as defined above) are divided into two

groups dependent on the size of IFU’s outstanding invest-

ment.

In this context the larger investments are defined as those

for which IFU’s outstanding investment is above or equal to

DKK �0m. These investments are initially valued by either the

Discounted Cash Flow method (DCF), by an earnings multiple,

if appropriate and reliable transaction/earnings multiples are

available, or by the net assets methodology, if appropriate.

All other unquoted share capital investments having met the

two-year operational criteria are initially valued at intrinsic

value according to the most recent financial statement for

the company received by IFU.

For all share capital investments, quoted as well as unquoted,

formal exit agreements, if any, will be taken into account when

performing the valuation.

Project loans, net

Fair value of project loans is measured net of or including

value adjustments relative to cost in DKK.

Project loans based on variable interest terms are initially

valued at the exchange rate adjusted cost.

Project loans with a fixed interest rate and an exchange rate

adjusted outstanding balance below DKK �0m are initially

valued at the exchange rate adjusted cost.

Project loans with a fixed interest rate and an exchange rate

adjusted outstanding balance above DKK �0m are initially

valued at the net present value of the future cash flow.

The initially estimated fair value is adjusted, if necessary and

appropriate, by taking into account specific terms as agreed,

if any, the expected sales value and accessibility of pledged

ac

co

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| �� | IFU ANNUAL REPORT �006

assets, if any, and the historical record of debt service and

actual defaults.

Fixed assets and leasehold improvements

Fixed assets and leasehold improvements are measured at

cost less accumulated depreciation and impairment losses.

Straight-line depreciation is made on the basis of an esti-

mated useful life of the fixed asset varying from � to � years.

Depreciation is recognised in the income statement under

operating expenses, net.

Fixed assets and leasehold improvements costing less than

DKK �0,000 per unit are recognised as costs in the income

statement at the time of acquisition.

Interest receivable related to projects

Interest receivable related to projects and other receivables

are measured at fair value, i.e. at actual exchange rates and

after adjustments for risk of loss.

Other receivables

As from �006 investments in projects where a formal liqui-

dation procedure has been initiated are transferred from the

project investments and stated as “Receivables from projects

in liquidation” under “Other receivables” in the balance sheet.

Comparative figures for �00� have not been revised due to in-

significance.

Included in other receivables are administrative receivables

and other receivables from bonds, both measured at cost.

Cash and bonds

Bonds are stated at the official prices quoted on the balance

sheet date except for called bonds, which are stated at par val-

ue. Realised and unrealised gains or losses on bonds are recog-

nised in the income statement under financial income, net.

Provision for losses

Provision for losses comprises anticipated losses related to

guarantee agreements. Adjustments of provision for losses

related to guarantee agreements are recognised in the income

statement as value adjustments, portfolio and receivables

under “Contribution from project loans and guarantees”.

Lease commitments

Lease commitments relating to assets held under finance

leases are capitalised and recognised in the balance sheet

under long-term debt or current liabilities and are measured

at amortised cost, which in most cases corresponds to nomi-

nal value.

Long-term debt

Long-term debt is measured at amortised cost, which in most

cases corresponds to nominal value.

Current liabilities

Current liabilities related to projects are measured at fair val-

ue. Other current liabilities are measured at amortised cost,

which in most cases corresponds to nominal value.

Cash flow statement

The cash flow statement has been prepared in accordance

with the direct method and shows IFU’s cash flow from ope-

rating, investing and financing activities as well as IFU’s cash

position at the beginning and end of the year.

Cash comprises cash at hand less short-term bank debt.

ac

co

un

tin

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ol

icie

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IFU ANNUAL REPORT �006 | �� |

accounting titel

�00� �006

DKK 1,000DKK 1,000NOTE

income statement

1/

�/

�/

�/

�/




GROSS CONTRIBUTION FROM PROJECTS


OPERATING INCOME


NET INCOME FOR THE YEAR

The net income for the year has been transferred to the equity capital.

��,�61

�9,8��

1�,��1

466,847

(��,�6� )

414,082

10,�9�

424,877

��,86�

(��,��8 )

(1�,0�� )

186,385

(�8,��8 )

148,007

6,�6�

154,470

inc

oM

e s

ta

te

Me

nt


accounting titel

�00� �006


Balance sheet at 31 december

18/

6/

18/

�/

8/

9/

10/

FIXED ASSETS

Share capital investment in projects at cost

Value adjustments


Project loans at cost

Value adjustments

Project loans, net


Total fixed assets

CURRENT ASSETS


Other receivables

Bonds

Cash

Total current assets

TOTAL ASSETS

1,06�,9��

(1�9,6�8 )

88�,�8�

8�0,�10

(�90,0�6 )

�60,��

�6�

1,445,001

1�,�10

19�,011

188,��6

1�0,�01

570,348

2,015,349

1,1�1,��0

(�6�,�0� )

66�,��8

�8�,��

(��,1�1 )

��,��

��1

1,123,093

11,9�9

�1,�18

1�1,0��

��0,80�

465,028

1,588,121

assets

Ba

la

nc

e s

he

et


accounting titel

�00� �006


11/

1�/

1�/

1�/

1�/

16/

1�/

EQUITY CAPITAL

Paid-in capital, net

Accumulated reserves


PROVISION FOR LOSSES

Guarantees

LONG-TERM DEBT

Total provisions and long-term debt

CURRENT LIABILITIES

Total liabilities

TOTAL EQUITY CAPITAL, PROVISION FOR LOSSES

AND LIABILITIES

FUNDS COMMITTED TO PROJECTS AND CLEARANCES IN PRINCIPLE

CONTINGENT LIABILITIES

PLEDGED ASSETS

RELATED PARTY DISCLOSURES

�00,9�6

1,68�,�96

1,983,732

0

�,��6

7,226

��,�91

24,391

2,015,349

�00,9�6

1,��,919

1,558,855

�90

8,6�1

9,261

�0,00�

20,005

1,588,121

Balance sheet at 31 december

liabilities and equity capital

Ba

la

nc

e s

he

et


accounting titel

�00� �006

DKK 1,000DKK 1,000

CASH FLOW FROM OPERATING ACTIVITIES

Dividends from projects received

Interest from projects received

Other project related payments


Net payments related to financial income and expenses

Net cash from operating activities

CASH FLOW FROM (TO) INVESTING ACTIVITIES

Received from sale of shares

Received from project loans

Paid-in share capital in projects

Disbursement of project loans

Received from (invested in) bonds

Net cash from (to) investing activities

CASH FLOW FROM (TO) FINANCING ACTIVITIES

Repaid to EIB (ECFI III Facility)

Net cash from (to) financing activities

NET CHANGE IN CASH

CASH BEGINNING OF YEAR

CASH END OF YEAR

��,6�6

��,�81

�,8�6

(�8,�� )

1�,�89

64,835

166,��9

9�,68�

(1��,��0 )

(19�,�98 )

(�6,8�1 )

(144,138 )

(1,�00 )

(1,300 )

(80,60� )

250,804

170,201

10,�0�

�9,��8

�,��8

(�1,��1 )

1�,��

33,805

��,6�1

1�1,�1�

(1��,0�8 )

(1�6,�� )

(1�,00� )

55,749

(1,�61 )

(1,261 )

88,�9�

162,511

250,804

cash flow statement

ca

sh

Fl

ow

st

at

eM

en

t


accounting titel

�00� �006


notes


Dividends from projects

Contribution from divested share capital investments

Value adjustments, portfolio



Interest income and fees related to project loans and guarantees

Value adjustments excl. exchange rate adjustments, portfolio

Exchange rate adjustments, project loans

Exchange rate adjustments, derivatives

Other value adjustments excl. exchange rate adjustments



Value adjustments, receivables, excl. exchange rate adjustments

Exchange rate adjustments, receivables

Exchange rate adjustments, derivatives

Interest from receivables

Other income and expenses


1

�

�

��,109

1�0,69�

199,��9

373,261

��,��6

��,9�8

(��,19� )

10,88�

�6�

79,835

1�,999

(�,�1� )

(6�1 )

�,�91

1��

13,751

10,996

1�1,90�

�0,966

223,865

��,�61

(9�,��9 )

��,6��

(1�,�6� )

(10,8�� )

(23,448 )

(1�,��0 )

�,6��

(�8� )

�11

(1,�� )

(14,032 )

no

te

s


accounting titel

�00� �006


notes

Operating expenses, net (IFU, IØ and IFV)

Expenses

Salaries, head office

Rental expenses

Travelling expenses

Regional office expenses

Fees for Supervisory Board

Fees for external assistance

IT expenses

Office expenses

Depreciation of fixed assets and leasehold improvements (note 8)

Various expenses

Total expenses

Income

Management fees

Board member fees, net of tax

Various income

Total income

Total operating expenses, net

Operating expenses, net charged to IØ

Operating expenses, net charged to IFV

IFU’s part of operating expenses, net

Fee to the auditor of the Funds included in

”Fees for external assistance” and ”Various expenses”:

- Hereof audit fees

- Hereof non-audit fees

�

�6,161

�,��

�,��8

�,�0�

1,�6�

1�,0��

�,��1

1,��9

�61

�,�8�

�6,8��

(1�� )

(�� )

(10 )

(��0 )

�6,�6�

(��,8�� )

(��6 )

52,765

1,938

1,��

681

�0,8��

�,6��

�,9��

�,�0�

1,��

1�,�66

�,6��

1,��

��

�,��

68,98�

(�� )

(�10 )

(�0 )

(�0� )

68,��6

(�9,�0� )

(696 )

38,378

1,354

81�

��

no

te

s


accounting titel

�00� �006


notes

�

�0,01�

�,8��

1��

43,009

1,�6�

�,��

��

�,6�1

�,6��

6,900

��

18

75

1�,�11

14,211

(�,109 )

(�0� )

(3,416 )

10,795

Specification of personnel expenses (salaries etc.) *

Salaries, remunerations etc.

Pension contributions

Other expenses for social security

Personnel expenses in total

Total remuneration to the Supervisory Board

Remuneration to the Executive Board:

Salaries and pension

Bonuses

Salary and pension to the former managing director during his availability

period, incl. severance allowance and paid-out vacation allowance

Total remuneration to the Executive Board

Total remuneration to the Supervisory Board and Executive Board

Average number of employees, head office (all three funds)

Average number of employees, regional offices (all three funds)

Financial income and expenses

Financial income

Interest income, cash and bonds

Financial income

Financial expenses

Interest expenses, bank charges and exchange rate adjustments

Loss on bonds

Financial expenses


��,�6�

�,618

1��

37,009

1,��

�,�9�

��0

0

�,��

4,075

�6

18

74

8,��

8,543

(8� )

(1,99� )

(2,080 )

6,463

no

te

s

*) The figures are included in ”Salaries, head office”, ”Travelling expenses”, ”Regional office expenses” and ”Fees

for Supervisory Board”.


accounting titel

�00� �006


notes

6

1,1�1,��0

1��,��0

�,�61

(�8�,�66 )

��,699

(18,�� )

1,063,942

(�6�,�0� )

6�,99�

199,��9

18,��

(1,1�1 )

(179,658 )

884,284

189,�08

(�69,166 )

(179,658 )


Share capital investment in projects beginning of year at cost

Paid-in share capital in projects during the year

Project loans or interest converted into share capital during the year

Proceeds from divestment of shares

Income from divestment of shares relative to cost, net

Share capital transferred to other receivables

Share capital investment in projects end of year at cost

Accumulated value adjustments beginning of year

Reversed value adjustments, divested share capital investments

Value adjustments, portfolio during the year (note 1)

Value adjustments related to transfer to other receivables during the year

Value adjustments related to conversions during the year

Accumulated value adjustments end of year

Share capital investment in projects, net end of year

Accumulated value adjustments end of year are comprised of:

Plus values

Value adjustments excl. plus values

1,1�8,�1�

1��,0�8

�,�09

(��,0�� )

��,�80

0

1,131,730

(616,98� )

11�,1��

�0,966

0

(�,�0� )

(464,202 )

667,528

��,1��

(�1�,��9 )

(464,202 )

no

te

s

Share capital investments acquired by IFU by means of syndicated capital are not included in the above figures and

amount to DKK 1�.�m (DKK 18.�m in �00�), measured at fair value.

Syndicated capital is investment capital received from third parties and invested in projects, in principle on their

own account and risk, and syndicated capital therefore only becomes due to the extent that IFU receives payment

from these projects.


accounting titel

�00� �006


notes

�

�8�,��

19�,�98

0

(9�,68� )

(1,1�9 )

(1�,�86 )

(16,1�6 )

(�,�80 )

850,410

(��,1�1 )

�,�80

1�,�86

10,��

1�,��6

0

(290,056 )

560,354

(��,�0� )

(��6,��9 )

(290,056 )

�06,��

1�0,�9�

�,��

850,410

Project loans, net

Project loans beginning of year at cost

Disbursements during the year

Interest converted into project loans during the year

Repayments during the year

Project loans converted into share capital during the year

Exchange rate adjustments during the year relative to cost

Project loans transferred to other receivables during the year

Write-offs during the year

Project loans end of year at cost *

Accumulated value adjustments beginning of year

Reversed value adjustments, loans written off

Exchange rate adjustments realised

Value adjustments incl. exchange rate adjustments, during the year (note �)

Value adjustments related to transfer to other receivables during the year

Value adjustments related to conversions during the year

Accumulated value adjustments end of year

Project loans, net end of year

Accumulated value adjustments end of year are comprised of:

Exchange rate adjustments relative to cost

Value adjustments excl. exchange rate adjustment

*) Project loans end of year at cost are comprised of:

Senior project loans

Subordinated loans

Equity loans

810,0�1

1�6,��

�,��8

(1�1,�1� )

0

(��,�� )

(�0� )

(�,�1� )

787,345

(�1�,8�� )

�,�1�

��,��

(��,8�� )

0

(1,�0� )

(332,121 )

455,224

(��,�9� )

(�08,�� )

(332,121 )

60�,0�6

1��,616

9,69�

787,345

no

te

s


accounting titel

�00� �006


notes

8

10�,�6�

��,�9�

�60,081

8,��

850,410

1,80�

�8�

(601 )

1,584

1,�61

�61

(601 )

1,221

363

0

�006 �00�

Currency Currency

DKK

USD1 �0,�� 9,��

EUR 61,�� ,�80

Other currencies

1) USD 1�.8m is hedged against DKK (USD 1�.�m in �00�)


Cost beginning of year

Additions during the year

Disposals during the year

Cost end of year

Depreciation beginning of year

Depreciation for the year (note �)

Depreciation for disposal of the year

Depreciation end of year

Book value end of year

The carrying amount end of year includes:

Recognised leased assets

11�,�60

��,��1

��,��

�,�90

787,345

�,1�1

0

(�19 )

1,802

1,�69

��

(��0 )

1,461

341

1�0

no

te

s

*) Project loans end of year at cost in DKK distributed according to currency denomination:

Project loans provided by IFU by means of syndicated capital are not included in the above figures and amount to

DKK 0.�m (DKK 0.�m in �00�), measured at fair value.


accounting titel

�00� �006


9

10


Interest receivable related to projects before value adjustments

Value adjustments


Other receivables

Dividend receivables

Receivables from sale of shares

Receivables from sale of loan

Receivable front-end fees

Receivables from projects in liquidation

Other project-related receivables

Value adjustments

Derivatives *

Administrative receivables

Current accounts

Accrued interest receivables from bonds

Rental deposits

notes

no

te

s

�9,�9�

(��,�8� )

14,710

9,��

166,��0

�0�

�,�1�

��,�69

18�

�1�,�18

(��,��9 )

1��,��9

9,060

�,88�

6��

�,��9

6��

197,011

�1,9�6

(�9,99� )

11,929

0

��,0��

��1

1,96�

0

61

��,��9

(16,��1 )

�0,��8

�,10�

1,9�0

��

�,��

6��

51,218

*) Stated amount for �006 concerns a hedged amount of USD 1�.9m with term from �00� to �011.


accounting titel

�00� �006


11

1�

1�

�00,9�6

0

300,936

1,��,919

��,8��

1,682,796

1,983,732

�,��6

7,226

1,��0

�,801

�,��1

16,80�

�,�9�

(��0 )

24,391


Paid-in capital beginning of year, net

Changes in paid-in capital during the year

Paid-in capital end of year, net

Accumulated reserves beginning of year

Net income for the year

Accumulated reserves end of year

Total equity capital end of year

Long-term debt

EIB (ECFI III facility) *

*) hereof payable after five years: DKK �,06�

Current liabilities

EIB (ECFI III facility)

Other project-related debt

Administrative debt

Current accounts

Deferred income

�00,9�6

0

300,936

1,10�,��9

1��,��0

1,257,919

1,558,855

8,6�1

8,671

1,�01

�,�1�

�,816

1�,699

0

�90

20,005

notes

NOTE

no

te

s


accounting titel

�00� �006


1�

1�

16

1�

�66,9��

1�,1��

��,�9�

726,474

343,831

Funds committed to projects and clearances in principle

Amounts payable on project agreements

Guarantees, net *

Binding commitments

Funds committed to projects

Clearances in principle for new projects amount to

*) Gross outstanding guarantees amount to DKK 1�,1�� (DKK 1,1�9 in �00�)

�8�,8��

�90

�10,91�

694,354

498,673

notes

Contingent liabilities

The total lease and rental commitments amount to DKK �.�m (DKK �.1m in �00�) - hereof due within the following

year DKK �.1m (DKK �.1m in �00�).

Pledged assets

On �1 December �006 IFU had pledged bonds and cash amounting to DKK 8.9m as security for long-term debt to EIB.

Related party disclosures

IFU project investments - shares and loans

IFU’s percentage interests in project investments often exceed �0%, but always remain below �0%. The project compa-

nies are not considered related parties, as no controlling or significant influence is exercised over them.

It should be noted that transactions conducted during the year with the project companies include dividends, interest

income and fees and directors’ fees from the companies in which IFU employees are board members.

Supervisory and Executive Boards

IFU’s other related parties are the members of the Supervisory and Executive Boards.

During the year there were no transactions other than remuneration paid to the Supervisory and Executive Board

members.

no

te

s

Funds committed to projects are comprised of undisbursed contractual commitments allocated for investments. The

stated amount of guarantees is net of provision for losses, if any.


pe

rio

d

project name activity / product danish partner shares (dKKm)

loans (dKKm)

totaldisbursed (dKKm)

totaloutstanding

(dKKm)

expected total

investment (dKKm)

expected direct em-ployment (persons)

actual direct em-ployment (persons)

iFu’s participation

�.�

��.1

8.6

61.�

0.0

130.0

8.6

8.6

11.1

1�.9

24.0

�6.�

�.�

0.8

6�.�

��.�

37.3

�0.�

50.5

6.9

6.0

12.8

0.�

0.7

�.0

��.1

60.1

�0.0

50.0

��.6

�1.8

�.�

0.�

�.8

10.�

0.0

24.1

��.9

47.9

1�.8

6.0

19.7

0.�

0.7

�.0

��.1

60.1

�9.9

49.9

�.�

1�.�

19.0

�0.�

8�.1

�.�

0.�

�.8

10.�

0.0

21.1

0.0

0.0

6.9

6.0

12.8

0.�

0.7

�.0

��.1

60.1

�9.9

49.9

�.�

�.1

12.5

�0.�

�0.6

�6.9

�60.0

�,��9.0

�,�00.0

1,�0�.�

7,590.2

6��.6

625.6

10�.0

1�.0

120.0

1.8

1.8

1�.8

1�8.�

142.5

��0.0

250.0

��.8

1�0.0

165.8

188.8

18.�

1.�

1,�9�.�

��

1,000

�0

1�

�

1,100

1,000

1,000

1�0

�0

220

��

22

1�

1,800

1,813

�,110

2,110

19�

6

201

�00

0

��

�00

��6

0

10

356

800

800

1�9

1�0

299

91

91

1�

1,610

1,624

96�

6

969

�18

��

Africa (Regional)

AMSCO

AfriNord Hotel Investment

African Infrastr. Fund

African Infrastr. Fund II

EFP¹

Total 5 active projects

Angola

Nova Cimangola

Total 1 active project

Benin

Cimbenin

Coman


Burkina Faso

Fan Milk


Cameroon

Kosan Crisplant Cameroon

Singa Banana Plantations


Congo

CIB


Cote d’Ivoire

Finamark

West Africa Growth Sicar


Egypt

Al Quseir Hotel Company

Int. Fruit Production

Orana Egypt

Sinai White Portl. Cement

Management services

Hotel management

Investment in infrastructure

Investment in infrastructure

Co-financing of projects

Production of cement

Cement

Expansion of terminal

Distrubution of dairy products

LPG filling stations

Production of bananas

Forestry

Dairy products

Financial institution

Hotel operation

Fruit based raw materials

Fruit compounds

Cement plant

Group of Danish Investors

SAS Hotels

BWSC


No Danish partner

FLSmidth

Fibo Maskiner

A. P. Møller-Mærsk

Fan Milk International

Kosan Crisplant


Dalhoff Larsen & Horneman


No Danish partner

SAS Hotels

Orana

Orana

Aalborg Portland

89>

0�>

00>

06>

06>

96>

91>

0�>

9�>

0�>

0�>

06>

0�>

9�> #

00>

06>

06>

99>

18 Active project portfolio

The following table shows the active projects in relation to which IFU has entered into investment agreements. For each coun-

try and project the table shows how much IFU has participated in the form of agreements for share capital and loans, IFU’s

total disbursements and outstanding amounts at �1 December �006. Furthermore, the table shows expected total investment

in the projects, expected number of jobs created and/or preserved at the projects and finally, the actual employment in �006

(for projects established before �006). Reference is made to the in-depth explanations below the table.

NOTE

aFrICa

active project portfolio at 31 december 2006


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




68.0

164.9

�.9

�.8

1.�

7.9

0.1

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72.2

�8.�

28.7

0.�

0.�

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1.8

6.0

1,�16.�

2,822.8

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��.0

1�.9

�.�

81.5

1�0.0

8.�

148.3

8�.0

85.0

�.�

2.4

�6.�

1�1.�

�0�.0

571.7

1,68�.6

1,684.6

�.�

�.6

1.�

�.6

9.1

6.�

��.�

1,0��

1,760

110

�0

80

80

320

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52

100

100

�00

200

�0

�,�00

��

2,275

�00

200

��

��

6

�1

��

10

��0

1,0��

1,603

�81

0

9�

1��

829

0

8�

87

�0

�,�88

1�6

2,464

��0

720

��

�

��

0

�

6�1

Suez Canal Cont. Term.


Ghana

Fan Milk

Ghana Emulsion

Larsen Ghana

Scanbech Ghana


Kenya

Acacia Fund

KBC (K)


Morocco

Helnan Chellah Hotel


Mozambique

First Natural Choice


Nigeria

Emperion West Africa

Fan Milk

W.Africa Container Term.


Senegal

Ciments du Sahel


South Africa

CareWorks South Africa

Danforge Engineering

Danish Thatching Company

Danline Bathroomware

FCK-UPE Soccer School

FLS Automation SA

Kristensen Oceanfront

Container terminal

Dairy

Cold emulsion

Waste Collection

Production of plastic bottles


Tent Camp

�-star hotel

Dried organic fruit

Internet related activities

Dairy

Container terminal


HIV/AIDS health care services

Machinery and equipment

Production of thatched roofs

Bath tubs

Sports education

Automated mining equipment

Restaurants



Phønix Contractors

J. Hvidtved Larsen

Scanbech Group

No Danish partner

KBC

Helnan Hotels

Woodshade Invest

Emperion



FLSmidth

AIDS-Fondet

Brdr. Jørgensen

Danish Thatching Company (DTC)

Danline

FC København / Parken

FLSmidth

Kristensen Group

0�>

89>

9�>

01>

98>

9�>

06>

0�>

06>

0�>

99>

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01>

06>

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0�>

0�>

0�> *

0�>

98>

AFRICA


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




06>

00>

98> *

99>

0�>

99> #

0�>

06>

80>

06>

01>

0�>

88>

0�>

06>

01>

01>

9�>

00>

Lafron Plating

Morsø SA (Pty)

Sibaya Conservation Proj.

Stoneground Mills

Virogates


Swaziland

United Plantations Africa


Tanzania

Crispo Snack Foods

Emunio Tanzania


Togo

ITP


Uganda

Biyinzika

K�-Informatics (U)

Victoria Engineering

Victoria Pumps


Zambia

Chulumenda

Munkumpo Farm


Zimbabwe

Ballantyne Butchery

Colcom

Imperial

Metafold Investments


Coating of metals and plastic

Sale of heating products

Hotels and restaurants

Manufacturing of mills

Prognostic markers

Plantations

Crisps production

Prod. and sale of safety syringes

Rubber and plastic products

Slaughter house

Management and IT consultancy

Steel fabricat./galvanization

Mechanical engineering

Farming

Agriculture

Meat processing

Meat processing

Coolers and freezers

Refrigerators and coolers

Elplatek

Morsø Jernstøberi

Hotel Pakhuset

ABC Hansen

Virogates

International Plantations

Crispo

Emunio

Nordisk Wavin

Agro Business Development

K�-Consult

Victoria Pumps

Knebel Drilling

Denbia

Peter Bernstorff

No Danish partner

No Danish partner

Maskinfabrikken Derby

No Danish partner

�.8

0.�

13.4

1�.�

17.3

6.�

6.7

�.�

5.5

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1�.0

16.0

�.0

1.�

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18.1

436.3

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0.9

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43.5

0.�

6.0

6.7

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1.8

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�.0

8.8

1.9

�.9

7.7

558.4

6.�

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0.9

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18.1

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0.7

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17.6

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1.�

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6.�

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1.1

0.8

1.�

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10.9

15.2

�.0

1.�

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8.7

493.6

�.0

10.�

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�.�

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99.4

88.�

88.5

8.1

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38.3

6�.0

63.0

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1�.1

16.0

37.9

�0.�

8�.�

102.7

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1.�

6�.0

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104.8

14,826.7

��

8

�0

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510

��0

750

16

��

68

8�

82

��

�1

8�

�0

221

1�0

��

207

�0

�00

1�0

90

580

13,791

8

0

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1

740

�1�

313

�

4

8�

83

1�

�8

100

165

1�0

120

166

1�1

�8

1�6

491

11,758Total AFRICA 57 active projects

AFRICA


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




Bangladesh

Comfort Wear Int.

Consumer Knitex

KAFCO (Plant)


China

AVK Sealing Technology

Anqing White Cement

BB Electronics China

BlueStar Cool Sorption

Brdr. Hartmann (Suzhou)

Codan Ling Yun

Desmi (Suzhou)

Dolle (Suzhou)

ECCO (Xiamen) Co.

ECCO Shoe (Xiamen) Co.

ECCO Tannery (Xiamen) Co

Flexa Suzhou Furniture

GPV (Suzhou) Co.

GPV Medical Equipment

Gleco Kunfeng

HD Machine Production

Huhhot Hua Ou Starch

Hydra Tech

Lanzhou Huanghe Jianiang

MBL China

Mengniu Arla Dairy Prod.

Mærsk Container

Qiaohong New Materials Co

Qinghai Huanghe Jianiang

RM Group Ningbo

Rosti (Suzhou)

SP Moulding

Sonion (Suzhou)

Tibet Lhasa Brewery

Ting Fung Starch

Vestas Wind Turbine Equip

Weike Zhuhai Electronic

Wenzhou Primotex

Knitted textiles

Vertical textile production

Fertilizers

Technical rubber

White cement production

Electronic components

Production of vapour recovery

Packaging in moulded fibres

Rubber hoses

Pumps for marine sector

Metal components

Shoe production

Production of shoes

Tannery

Furniture

PCB production

Turning and milling

Packaging materials

Metal components

Starch products

Hydraulic cylinders

Production and sale of beer

Components for wheel chairs

Production/sale of milk powder

Production of ship containers

Sanitary fibre products


Steel and metal components

Production of plastic parts

Production of plastic products

Speakers and connectors

Production of beer

Starch products

Production of blades

Toroidal transformers

Production of buttons

H.C. Holding Thy

CPI Clothing Partners

Haldor Topsøe

AVK Gummi

Aalborg Portland

BB Electronics

Cool Sorption

Brdr. Hartmann

Codan Gummi

Desmi

Dolle

Ecco Sko

Ecco Sko

Ecco Sko

Flexa Holding

GPV International

GPV Industri

Gleco

HD Design Invest

Kartoffelmelcentralen

Hydra Tech

Carlsberg Breweries

MBL

Arla Foods

Mærsk Container

Dan-Webforming

Carlsberg Breweries

RM Group

Rosti

Schrøder-Plast

Sonion Horsens

Carlsberg Int.


Vestas

Ulveco

Moria Industri

06>

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8.6

61.1

69.7

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47.7

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800

2,478

60

180

��0

10

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160

��

1�0

1,�00

100

1,�00

1�0

�00

89

��0

��

100

�0

1,6�6

1,600

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600

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�00

�0

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60

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1,0��

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168

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1,96�

0

0

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1,�80

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A SIA

aSIa


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




96>

06>

0�> #

0�>

0�>

06>

0�>

99>

0�>

0�>

0�>

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0�>

0�>

98>

96>

06>

06>

06>

0�>

0�>

89> *

9�>

00>

Zi Dan


India

Aleksika India

Alumeco India Extrusion

Avesta Nordic

Danish Steel Cluster

Elsteel Modular Products

FLS Automation India

Fowler Westrup (India)

G�S Cash Services

G�S Corporate Services

G�S Security Services²

Global Wool Alliance

IMT Labs India

Indan Energy

KE Burgmann India

Kampsax India

Kring Technologies

Nordisk Granit India

Orana India

Pedershaab Millars

Procon

Shetron Metropak Pvt

South Asia Breweries

Sunico India

Vestas Wind India


Indonesia

Damai Lovina Villas Bali

Danindo

P.T. Aalborg Industries


Jordan

Kemapco


Printing

Search engine optimization

Prod. of aluminium profiles

Drugs against osteoporosis

Production of steel items

Steel fabrication

Production of control systems


Security systems

Security Systems

Security systems

Textiles

Automated chat

Windfarm

Production of expansion joints

Mapping

Software development

Granite products

Production of fruit compounds


EDP software

Production of metal caps


Production of CDs and DVDs

Manufacture of wind turbines

Tourist resort

Fishing

Fabricated metal products

Fertilizers

Heidelberg

Aleksika

Alumeco

CCBR

Steel Partner

Elsteel

FLSmidth

Westrup

Group � Holding

Group � Holding

Group � Holding

EAC

IMT Labs

San

KE-Burgmann

Cowi

Kring Technologies

Nordisk Granit Import

Orana

Pedershaab

ProCon Solution

Metropak

Carlsberg Breweries

Sunico

Vestas

Small Tropical Hotels

J. Lauritzen

Aalborg Industries

Kemira

8.8

325.3

1.�

6.9

��.�

�.�

�.�

�.1

19.�

�.�

0.�

�.�

1.8

0.6

0.�

0.6

0.6

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9.6

85.5

6.�

9.9

16.6

�.�

3.3

204.9

0.�

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1.6

�.6

�.6

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�.�

�.�

9.�

1.8

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111.�

217.0

�.1

�.6

6.7

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8.�

375.1

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0.8

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0.�

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256.0

0.�

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56.3

8.�

317.9

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207.0

0.�

9.�

9.6

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1��.0

3,341.8

�.8

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11.6

1�.�

10.0

1�.�

18.6

�.�

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11�.6

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176.0

�10.�

710.7

�86

12,174

�0

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8�

1,000

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18

�

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100

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8

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6

1�6

186

100

6,925

66

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101

234

�0�

205

80�

11,676

��

0

�1

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�09

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19

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0

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8,927

66

0

66

132

�16

216

ASIA


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




0�>

0�> #

0�> #

0�> #

9�>

0�>

0�>

00> #

9�>

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0�>

88>

9�>

9�>

0�> #

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98> #

98> *

98>

98>

98> *

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A SIA

Production of white cement

Dry mortars

Marketing of dry mortars

Lime stone quarry operation

Food and beverages

Prod. of safety syringes

Non woven textiles

Production of stone wool

Medical/precision instruments

Water supply

Bottled water

Brewery



Wholesale of white cement

Energy production/distribution

Trade and distribution

Rubber products

Rubber products

Dessicated coconuts

Manufacture of footwear

Fabricated metal products

Aalborg Portland

Aalborg Portland

Aalborg Portland

Aalborg Portland

Niro

Emunio

Fibertex

Rockwool International

Scandinavian Avionics

HOH Water Technology

HOH Water Technology

Carlsberg

FLSmidth

FLSmidth

Aalborg Portland

BWSC

Aarhus Karlshamn

Aarhus Karlshamn

Aarhus Karlshamn

Aarhus Karlshamn

Aarhus Karlshamn

Erik Løgstrup

8�.�

�8.�

�.�

1�9.0

�0.1

1.1

318.4

�0.0

20.0

8.1

8.1

��.9

�6.0

78.9

9.9

1�.�

23.1

1.�

1.6

�9.6

52.8

�0.�

20.3

�.0

5.0

�.8

�.0

12.8

8�.�

�6.8

1.1

1�9.0

98.�

0.9

339.4

�6.�

36.3

1�.6

12.6

��.�

�8.9

71.2

10.0

�1.0

�.0

36.0

8�.�

��.�

1.1

101.�

211.4

16.0

16.0

0.1

0.1

1�.�

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37.8

10.0

�1.1

1.0

32.1

�90.6

1�8.�

1�.�

��1.0

��.9

�.0

1,324.7

1��.8

135.8

��.0

52.0

9�0.0

1,1��.0

2,095.0

��.0

1��.1

�9.�

555.4

�08

1�0

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1��

10�

�

593

9�

95

100

100

�00

�90

790

60

�,889

��0

3,289

1��

100

1�

1�1

1�9

�

576

��

247

�8�

385

�60

8��

1,392

69

�1�

�09

991

Malaysia

Aalborg White Asia

Skim Coat Industries

SCI Marketing

Aalborg Resources

Dankaffe

Emunio Manufacturing Co.

Fibertex Nonwovens

Roxul Asia

Scanavionics


Maldives

Male Water & Sewerage

Island Beverages Maldives


Nepal

Ghorka Brewery


Pakistan

Fauji Cement

Maple Leaf


Philippines

[Aalborg White Asia, Malaysia]

Aalborg White (Philipp.)


Sri Lanka

Asia Power

C.W.Mackie & Co.

Ceytra Limited

Ceymac Rubber Co.

Serendib Coconut Products

Korea Ceylon Footwear

Elsteel



pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




0�>

0�>

06>

0�>

0�>

98>

99>

06>

9�>

0�> #

9�>

0�>

0�>

06>

0�>

01>

0�>

06>

0�>

0�>

06>

0�>

0�>

0�>

0�>

Thailand

Caretex

Energy Maintenance Serv.

Feldborg Thailand

Flux International

GPV Asia (Thailand) Co.

Georg Jensen Thailand

Nation Egmont Edutainment

NewCo Thailand Co.

Penadansk

Porcelain Painting

Premier Dairy Food

Styromatic Thailand

Tricon Thai Automation


Vietnam

An Phu Design Co.

GJ Teknik Vietnam

KMC Tapioca Starch Co.

Orana Vietnam

Reproflex Vietnam

Scancom Vietnam

Sea Saigon Shipping Co.

TAC Paritas

Topas Eco Lodge

VHC Fabricius

Vidagis Co.

Viking Vietnam


Production of container liners

Production of control systems

Tropical ornamental plants

Prod. of electronic components

Service of metal parts

Jewellery

Publishing house

Mobile clinics

Textiles

Porcelain painting

Dairy

PCB production

Prod. of electronic components

Graphic industry

Solar energy collectors etc

Starch products

Production of fruit juice

Graphic design

Production of furniture

Shipping company

Printing house

Tourist lodge

Vessel holding company

GIS services

Rain wear and work wear

Caretex

Orbital

Feldborg Tropical Plants

Flux Transformerteknik

GPV International

Royal Scandinavia

Egmont

GPV Industri

Dansk Transfertryk

Royal Scandinavia


Styromatic

Tricon Holding

Buchs

GJ Teknik


Orana

Reproflex

ScanCom International

Fabricius

Paritas

Topas

Fabricius

Watertech

Viking Rubber

Total ASIA 112 active projects

0.8

1.9

16.6

�.1

9.�

1.8

�.0

36.5

0.1

0.8

�.1

1.0

1�.�

11.9

0.�

0.�

32.1

989.4

1.6

0.�

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55.9

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70.7

759.3

1.6

0.�

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18.6

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18.�

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1.0

1.6

�.8

1.0

78.2

0.1

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6.�

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10.8

0.�

0.�

96.2

1,436.5

0.6

0.1

�.�

�.�

18.6

�0.0

0.�

�.8

0.9

49.8

0.1

6.�

�.0

�0.�

6.�

0.�

1.1

10.8

0.�

0.�

79.6

1,061.7

�.�

1.�

�.6

8.0

10�.�

�8.0

��.0

��.�

�1.0

�.0

8.0

�.9

�.0

292.4

1.0

�.�

��.0

�.1

�.1

1�9.�

��.0

�.�

6.1

�6.8

0.8

�.0

288.5

14,343.5

116

1�

��

1�0

�80

��0

�0

��

�0

100

1�

�0

��

1,534

18

�9

1�0

��

�0

�,��

��

��

1�0

�0

�0

4,974

33,391

��

1�

1��

�9�

�10

�1

�

��

6�

16

�8

1,572

1�

10�

8�

�,��

1�

�1

��

�6

��0

3,894

31,078

ASIA


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




06>

06> #

06>

06>

0�>

88> *

0�>

Armenia

Lusakert Biogas Plant


Bosnia & Herzegovina

Horizonte BH Enterprise³


Georgia

Georgian Natural Products³


Serbia & Montenegro

Carlsberg Serbia³


Turkey

Damptech Turkey

Köytür Integrated Poultry

Radisson SAS Ortaköy


Biogas plant


Production of hazel nuts

Brewery

Seismic protection

Agriculture and farming

Hotel with restaurant

Bigadan

No Danish partner

Venndt

Carlsberg Breweries

Damptech

KFK

SAS Hotels

1.�

1.5

1.�

1.3

0.0

0.0

1��.0

135.0

1.8

1�.�

16.2

154.0

0.0

0.0

1�.�

�8.�

45.6

45.6

1.�

1.3

0.0

0.0

11�.�

115.7

0.�

�1.9

�8.6

60.8

177.9

1.�

1.3

0.0

0.0

11�.�

115.7

0.�

��.�

��.�

77.1

194.1

��.�

23.4

0.0

0.0

0.0

0.0

818.8

818.8

�.0

1,��0.8

�00.0

1,933.8

2,776.0

9

9

6

6

1�0

140

�90

490

�

�,�00

��0

2,957

3,602

0

0

1�9

179

179 Total EUROPE 7 active projects

EUROPE

EUropE


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




0�> #

0�>

01> *

90>

01>

9�>

0�> #

00>

9�>

9�>

0�>

00>

0�> #

0�> #

0�>

01>

98> *

06>

06> #

Bolivia

Check Point Latin America


Brazil

Bio Nutrientes do Brasil

Caribersa

Cáceres Florestal

Dânica Nordeste

Dânica Termoindustrial

Euro Matic Brazil

Frio Grande do Norte

Hartmann-Mapol

Hartm.-Mapol Montes Claro

ScanCom do Brasil


Chile

C.A. Holding


Cuba

Check Point Cuba

Rex Car Rental


Dominican Rep.

SeraScandia Dominicana


Mexico

Roulunds Mexico


Nicaragua

ENISA

Protena

T� Nicaragua


One-Stop-Tour-Operator for LA

Production of Serum and Plasma

Technical Service Provider

Forestry

Production of coldstore panels

Production of coldstore panels

Prod. of plastic products

Cold Store for Fruits

Pulp and paper products

Pulp and paper products

Drying/processing of hard wood

Units f/controlled atmosphere

Tour operator

Car Rental in Cuba

Production of Plasma and Serum

Rubber auto spare parts

Wind mill farm

Plasma & haemoglobin

IT services

Check Point Travel

Sera-Scandia

Kampsax

Dalhoff Larsen & Horneman

Dânica Corporation

Dânica Corporation

Euro-Matic

J. Lauritzen

Brdr. Hartmann

Brdr. Hartmann

ScanCom International

J. Lauritzen

Check Point Travel

Biludan Gruppen

Sera-Scandia

Codan Gummi

No Danish partner

Sera-Scandia

T �6

�.9

10.8

�.�

�9.�

58.5

6.�

6.2

�.�

7.5

0.6

0.6

�.8

0.�

8.6

1.�

�.6

�.�

�.1

�1.�

56.5

11.�

11.2

0.�

�0.0

30.2

0.6

0.6

��.�

24.4

0.�

1�.1

�.8

17.3

0.6

0.6

1.9

�.�

1�.6

1.�

�.�

�.6

8.9

��.0

1�.�

84.1

1�.�

17.4

�0.0

30.0

0.6

0.6

��.�

23.4

0.�

6.0

6.4

0.�

0.7

1.�

�.�

1�.6

1.�

1.9

1.0

�.0

��.0

1�.�

74.9

�.�

5.2

�0.0

30.0

0.�

0.4

�.0

3.0

0.�

6.0

6.4

1.�

1.4

1�.1

8.�

1�8.0

�.�

��.0

11.�

19.�

��.�

9�.�

654.0

��.9

27.9

0.�

�9.�

79.6

9.�

9.3

80.0

80.0

0.6

��.0

�0.0

42.6

1�

12

��

8�

��0

��

��

�1

�

600

�60

1,733

��

22

�

100

102

1�

17

100

100

�

�0

��0

285

�8

28

1�

0

�00

�8

��

6�

6

��

6��

1,786

�

2

��

��6

259

�

5

�98

298

0

L AT INAMERICA

LatIN amErICa


pe

rio

d


loans (dKKm)


totaloutstanding

(dKKm)

expected total

investment (dKKm)




01>

06>

91>

00>

06>

0�>

Panama

Pedregal Power Co.

Rohde Nielsen Panama


Peru

Danper Trujillo

Segetrans Peru


Uruguay

Ontur International


Venezuela

Bioven


Thermical Electricity Plant

Land reclamation & real estate

Asparagus processing

Trucking of fruit a.o.

Export terminal facility

Production of Hemoglobin

BWSC

Rohde Nielsen

AHB Holding

J. Lauritzen

Lauritzen Cool

Sera-Scandia

0.1

0.1

�.1

0.�

2.6

74.9

1,654.6

�6.�

�6.8

73.5

��.�

�.�

24.5

8.6

8.6

�.�

3.3

250.7

1,614.1

��.6

24.6

��.1

�.�

26.8

�.9

2.9

216.8

2,564.3

��.6

24.6

16.9

16.9

�.9

2.9

164.9

1,914.4

��.6

1�6.6

600.2

86.�

�.8

92.3

1��.�

122.4

�0.�

20.5

1,730.2

33,676.4

�0

1�0

200

�00

�0

320

168

168

81

81

3,040

53,188

6�

62

�,1�0

16

5,146

10�

103

7,689

50,704

Total LATIN AMERICA 25 active projects

Employment totals: 47,240

5,9484

50,348Active projects established before 2006

Active projects established in 2006

Active projects 201

The project list in the annual report for �006 comprises active projects at

�1 December �006.

As from December �006 a project is considered to be exited when the fol-

lowing two conditions have been met: 1.a. All loans have been fully repaid

incl. interest, and 1.b. IFU’s shares have been sold according to a legal

binding agreement without any conditions precedent or �. A bankruptcy/

liquidation procedure has formally been initiated by appointment of a liq-

uidator/receiver. Until these criteria have been met, projects may appear

in the list of active projects even if the operation is discontinued. Further-

more, subsidiaries of projects with direct financial participation from IFU

(indirect projects) are named directly under the relevant parent company,

whereas all financial data related to indirect projects are included in the

data shown for the parent company. Compared to the investment portfo-

lio at �1 December �00� minor corrections have been made.

IFU’s participation is the accumulated sum in DKK of IFU’s contracted in-

vestments in the project companies since project start. Investments de-

nominated in foreign currency are stated in the DKK equivalent at the

exchange rate prevailing at the time of signing of the investment agree-

ment. Share capital participation includes overrun commitments and

Note to the active project portfolio

L AT INAMERICA


amounts converted from loans. Loan participation includes guarantees

and interest converted to principal. The figure for IFU’s total participation,

which is a historical aggregation of all contracted investments, does not

relate to the figures for outstanding investments in the balance sheet at

year-end.

Total disbursements are the total sum in DKK of share capital and loans at

�1 December �006 disbursed to projects as at �1 December �006. Disburse-

ments in foreign currencies are stated in the DKK equivalent at the ex-

change rate prevailing at the time of disbursement. Disbursement figures

can be different from the figures for IFU’s participation due to changes in

the exchange rate for the currency in question, if the contracted amount is

not fully disbursed, or if the stated participation includes amounts origi-

nating from conversions.

Total outstanding is the outstanding amount of share capital and loans

stated in DKK at cost and can be reconciled with the figures in the balance

sheet. Total outstanding may include outstanding amounts originating

from conversions, and the total may therefore be larger than the dis-

bursed amount.

Expected total investment is the expected total investment in the project

company in DKK since IFU’s involvement, as foreseen at the most recent

appraisal stage (the original appraisal stage or a later appraisal stage if

additional financing has been provided). The figure for expected total in-

vestment is not directly comparable to the figures for IFU’s participation.

This is primarily because IFU’s participation may include amounts origi-

nating from conversions, overrun commitments on share capital, and/or

participations that are guaranteed by IFU’s partners.

Expected direct employment is the number of persons expected to be

employed directly in the project company once full capacity utilisation

is achieved, as foreseen at the appraisal stage (either at the original ap-

praisal stage, or at a later appraisal stage if additional financing has been

provided, and the figure for expected employment has risen). For green-

field projects the figures indicate the number of jobs expected to be cre-

ated, while for brown field projects the figures indicate the number of

jobs to be created and/or preserved.

Actual direct employment shown for the active projects is the actual total

number of persons employed directly in the project companies, including

subsidiaries, typically calculated in the final part of the year, as reported

to IFU by the project company. In case part of the company’s activities

is run by an external contractor, the persons employed by the external

contractor are included. There may be figures for actual employment even

if IFU has not made any disbursements to the project. This will typically be

the case when IFU’s participation takes place in the form of a guarantee

or in case IFU invests in a brown field project and disbursements have not

yet taken place. No adjustments have been made for seasonal variation in

the number of employees or for part-time employees. No figures for actual

employment are shown for projects established in �006. The figures for

actual employment for active projects are typically lower than the figures

for expected (full capacity) employment because a number of the projects

are under implementation.

* Operation discontinued

# Investment through a holding company

1) Covers all ACP countries, but is primarily active in Africa.

�) The employment figure stated for G� Security Services in India is the

expected increase in the number of employees following the expan-

sion of activities in connection with IFU’s financial participation in the

project. Total number of employees at the company was 8�,�00 at the

end of �006.

�) Project transferred to IFU from IØ in �006. The starting year in IFU is

consequently stated as �006. The history at IØ can be found in the IØ list

of exited projects with exit year �006 on IØ’s website.

�) Excluding the three projects transferred from IØ.


co

rp

or

at

e s

oc

ial

re

sp

on

siB

ilit

y

OHS No. of projects %Code of Conduct No. of projects % External environment No. of projects %

Excellent �0 �6

Good �6 1�

Fair �� 1

Poor � 1

Critical 1 0

Without classification �8 �9

Total 201 100

Excellent �1 10

Good �8 �0

Fair �9 19

Poor � 1

Critical 0 0

Without classification 61 �0

Total 201 100

Excellent 18 9

Good ��

Fair ��

Poor � 1

Critical 1 0

Without classification 6� �1

Total 201 100


compliance with corporate social responsibility in 2006

Every year IFU’s CSR Unit and the investment officers

carry out an internal review of all relevant CSR aspects

of the active projects to see how the projects work with

the aspects in relation to IFU’s policies and procedures.

As part of the new CSR policy of November �00�, IFU

has implemented new assessment and implementation

tools. Consequently, the annual review of new projects

will be based on a new methodology, especially the use

of the Human Rights Quick Check tool. The Quick Check

tool is a questionnaire related to human rights, labour

rights and health and safety issues based on the Hu-

man Rights Compliance Assessment Tool (HRCA), which

has been developed by the Danish Institute for Human

Rights in cooperation with the Confederation of Danish

Industries (Dansk Industri) and IFU.

All new projects from �006 follow this new methodol-

ogy, which is based on the results from the Quick Check,

follow-up activities in a project-specific action plan,

the annual CSR reports from the project related to all

relevant CSR issues, and information from board meet-

ings and visits to the project site.

All projects prior to �006 follow the methodology based

on the former assessment methodologies, as they had

already been agreed upon with the project companies

in line with IFU’s Environmental Policy and Code of Con-

duct. They are also based on reporting from the project,

agreed action plans, and information from board meet-

ings and visits to the project site.

The assessment methodologies are not the same for

projects approved before and after 1 January �006. IFU

has, however, decided to keep the same scoring system

for �006 as used in the previous years, i.e. 1) Excellent

�) Good �) Fair �) Poor and �) Critical.

Projects with a “poor” or “critical” score are projects

which have IFU’s special attention, and where IFU and

its partners look into all possibilities to remedy the

problem.

In some cases, the projects do not have any classifica-

tion. These projects are typically in the process of being

established or closed down.

Labour rights and human rights review

In �006 labour rights and human rights reviews were

carried out for 1�� projects.

1�9 projects were classified as fair or better meaning

that they were complying with labour rights and hu-

man rights issues relating to their specific project in the

host country, and that they were working with the chal-

lenges to an extent satisfactory to IFU.

Four projects were classified as poor or critical meaning

that they had special attention, and that action plans

were being prepared to improve their performance.

Environmental review

In �006 environmental reviews were carried out for 1�0

projects. 1�8 projects were classified as fair or better

meaning that they were in compliance with host coun-

try legislation, had already met international standards,

or were working towards meeting international stan-

dards to an extent satisfactory to IFU.

Two projects were classified as poor meaning that they

had special attention, and that action plans were being

prepared to improve the performance of these projects.

Occupational Health and Safety review

In �006 Occupational Health and Safety reviews were

carried out for 1�9 projects. 1�6 projects were classified

as fair or better meaning that they were in compliance

with host country legislation, had already met interna-

tional standards, or were working towards meeting in-

ternational standards to an extent satisfactory to IFU.

Two projects were classified as poor and one as critical

meaning that these projects had special attention, and

that action plans were being prepared to improve the

performance of these projects.

CSr


Ma

na

ge

Me

nt


>

supervisory Boardand executive Board

maNagEmENt

Johannes Poulsen, Chairman (1942),

member since 1997.

MSc (Economics and Business Administration). Director, BUUR INVEST A/S. Other board

memberships: IØ**, IFV**, AXCEL IndustriInvestor A/S, AXCEL II A/S, Extend Reach

Corporation A/S*, Bukkehave A/S, Dantherm Holding A/S, Eksport Kredit Finansiering A/S,

F.L.Smidth & Co. A/S, F.L.Smidth A/S, Frandsen Holding A/S, Frandsen Lighting A/S,

JP/Politikens Hus A/S, Eksport Kredit Fonden, Skjern Papirfabrik A/S, VM Tarm A/S.

Michael Rasmussen, Deputy Chairman (1964),

member since 2000.

MSc (Economics). Member of the Executive Management, Nordea Bank Denmark A/S.

Other board memberships: IØ*, IFV*, Nordea Realkreditaktieselskab, Nordea Finance,

Dansk Ejendomsfond I A/S**, Nordea Liv & Pension, LR Realkredit A/S.

The Danish Minister for Development Cooperation appoints the Chairman, the Deputy Chairman and the

other members of the Supervisory Board for a three-year period. Each appointment is personal.

The current Supervisory Board has been appointed for a three-year period beginning 1 August �006.

The Supervisory Board usually convenes on a monthly basis. On the recommendation of the

Executive Board, it makes decisions about investments and key issues.

The rules of disqualification follow the provisions of the Public Administration Act (Act No. ��1 of

19 December 198�, sections �–6). The principle is that a member of the Supervisory Board or an employee

cannot participate in the discussion of a case involving a company in which the person in question has a

special interest.

Members of the Supervisory Board may not buy or sell shares or other securities issued by companies of which

they have obtained special knowledge through board work. To prevent insider trading, the Supervisory Board

authorises an updated list at each meeting of the listed companies of which the Supervisory Board believes it

has inside information; however, the prohibition of utilising knowledge from board work applies in general.

All information received by the members of the Supervisory Board, orally or in writing, is being treated with

full confidentiality.

Supervisory Board


Ma

na

ge

Me

nt

Susanne Hyldelund (1968),

member since 2006.

MSc (Business Administration). Head of Customer Relations in the Danish Trade Council,

Ministry of Foreign Affairs. Other board memberships: IØ, IFV.

Betina Hagerup (1961),

member since 2006.

MSc (Business Affairs). Deputy Permanent Secretary, The Ministry of Economics

and Business Affairs. Other board memberships: IØ, IFV, VisitDenmark,

Eksport Kredit Fonden.

Lars Andersen (1958),

member since 1994.

MSc (Economics). Managing Director, The Economic Council of the Labour Movement.

Other board memberships: IØ, IFV, DSB, Industripension Holding A/S, Industriens

Pensionsforsikring A/S, Naesborg A/S.

Sigurd Ø. Andersen (1951),

member since 2000.

MSc (Engineering). Managing Director, Burmeister & Wain Scandinavian Contractor A/S.

Other board memberships: IØ, IFV, Pedregal S. de R.L., BWSC A/S, BWSC Mindanao Inc.,

BWSC Panama S.A., Brancheforeningen for Biogas, Brancheforeningen for EnergiIndustrien,

Center for Bioenergi og Miljøteknisk Innovation.

Elsebeth Budolfsen (1947),

member since 2000.

MSc (Pharm). Chairman. Other board memberships: IØ, IFV, Fertin Pharma A/S, Contura A/S,

Contura International A/S, NSGene A/S, Persona A/S, DDS ltd.**, Risø, Jacobsen Pharma A/S**.

Member of the Advisory Board, Danske Bank A/S.


Ma

na

ge

Me

nt

Executive Board

The Danish Minister for Development Cooperation appoints the Managing Director. The rules which apply

to the Supervisory Board regarding selling or buying shares or other securities issued by companies of which

they have obtained special knowledge also apply to the Managing Director and the Deputy Managing Director

in their capacity as members of the Executive Board.

Finn Jønck (1948),

Managing Director since 2006.

MSc (Economics).

Frank Norman Larsen (1949),

Deputy Managing Director since 1994.

MSc (Political Science).

Ib Petersen (1960),

member since 2005.

MSc (Political Science). State Secretary, Ministry of Foreign Affairs.

Other board memberships: IØ, IFV.

Agnete Raaschou-Nielsen (1957),

member since 2000.

PhD (Economics). Vice President, Aalborg Portland Group. Other board memberships:

IØ, IFV, Kuben A/S*, Höganäs AB, Danske Invest Administration A/S, Sinai White Portland

Cement Co., Sydsten AB, Aalborg Portland White A/S.

** Chairman - * Deputy Chairman


lis

t o

F a

BB

re

Via

tio

ns

list of abbreviations

ACP Countries in Africa, Caribbean and Pacific being

part of the Cotonou Agreement

ACR Annual Conduct Review

AESR Annual Environmental Status Report

CSR Corporate Social Responsibility

Danida Danish International Development Assistance

DFI Development Finance Institution

DKK Danish kroner

EDFI European Development Finance Institutions

EFP European Finance Partners

EIB European Investment Bank

EU European Union

EUR Euro

FDI Foreign Direct Investment

GNI Gross National Income

IFC International Finance Corporation

IFU The Industrialisation Fund for Developing Countries

IFV The Investment Fund for Emerging Markets

ILO International Labour Organisation

IRR Internal rate of return

IØ The Investment Fund for Central and Eastern Europe

OHS Occupational Health and Safety

SIMI Scandinavian International Management Institute

SME Small and Medium-sized Enterprises

USD United States dollar

WWF World Wildlife Foundation

AN

NU

AL

RE

PO

RT

20

06

Contents

Executive Board

Legal Unit

Finn JønckManaging Director

Frank Norman LarsenDeputy Managing Director

Elsebeth H. RasmussenExecutive Assistant

Klaus FridorfHead of Communications

Project Development Department (PDD)

Torben HussDepartment Director

Jens BayerSenior Investment Manager

Kim GredstedSenior Investment Manager

Rami KhouryInvestment Manager

Morten MikkelsenInvestment Manager

Martin RømerInvestment Manager

Peter SchwalbeSenior Investment Manager

Kasper SvarrerInvestment Manager

Natalia SvejgaardInvestment Manager

Lone JespersenProject Secretary

Maria MontiProject Secretary

Rina WachsbergProject Secretary

Jens RixenSenior Legal Adviser

Investment Management Department (IMD)

Morten ChristiansenDepartment Director

Catherine Isabelle CaxInvestment Manager

Rena ChenInvestment Manager

Peer MunkholtSenior Investment Manager

Hans-Jørgen NyegaardSenior Investment Manager

Anders Paludan-MüllerSenior Investment Manager

Lis BluhmeProject Secretary

Birthe BræstrupProject Secretary

Csr Unit

Birgitte Bang NielsenHead of CSR

Michael Wedel SørensenEnvironmental Adviser

special Operations Department (sOD)

Svend J. HeinekeDepartment Director

Lisbeth ErlandsSenior Investment Manager

Max KruseSenior Investment Manager

Jens Lund SørensenSenior Investment Manager

Birgitte WaageProject Secretary

Linda WamslerProject Secretary

Corporate Administration Department (CAD)

Henrik JepsenDepartment Director

Lise Stougård ThomsenDepartment Secretary

Archives

Birgitte ChristensenChief Archivist

secretariat

Bjørn JakobsenHead of Secretariat

IT Unit

Michael Stig AndersenSystem Administrator (IT)

Søren HeilmannSenior SystemAdministrator (IT)

IFU Offices (reporting to IMD)

BEIJING - CHINA

Hong JiangChief Representative

BEIJING - CHINA

Le AnInvestment Manager


Deepak MalikResident Representative


Tayengwa MasawiInvestment Manager

NAIROBI - KENYA1

Brian M. AndersenResident Representative

NAIROBI - KENYA1

Mainga MukandoInvestment Manager

NEW DELHI - INDIA

Deepa HingoraniResident Representative

NEW DELHI - INDIA

Rahul Dubey2

Investment Manager

NEW DELHI - INDIA

Manoj RalhanInvestment Manager

NEW DELHI - INDIA

Sanjay ChatterjiIT-Officer

NEW DELHI - INDIA

Rajat KanwalAssistant SystemAdministrator

NEW DELHI - INDIA

Manmohan MalhotraIT-Officer

CAPE TOWN - SOUTH AFRICA

Anders ÆrøeRegional Adviser

Advisers

GLOBAL

Helle BechgaardDenmark

GLOBAL

Uffe Bundgaard-JørgensenDenmark (Facilitator)

GLOBAL

Søren GuldborgDenmark

GLOBAL

Jørgen Dan JensenDenmark

GLOBAL

Henrik de JonquièresDenmark (Facilitator)

GLOBAL

Mikael OlufsenDenmark (Facilitator)

GLOBAL

Tonny Bech PedersenDenmark

GLOBAL

José M. RuisánchezWashington D.C., USA

GLOBAL

Hans SchiønnemannDenmark (HRD Adviser)

GLOBAL

Flemming SehestedDenmark

GLOBAL

Bendt StarupDenmark (Facilitator)

AFRICA

Kodjo AziagbéDakar, Senegal

AFRICA

Gareth CampbellJohannesburg,South Africa

AFRICA

Johnni P. KjelsgaardNairobi, Kenya

AFRICA

Jens Eric MollenbachLagos, Nigeria

AFRICA

Farouk NasserCairo, Egypt

AFRICA

Felix QuansarAccra, Ghana

AFRICA

Frank RoostMaputo, Mozambique

ASIA

Leo Emdal AlexandersenBangkok, Thailand

ASIA

Riyaz BokhariLahore, Pakistan

ASIA

Nalan CumcumAnkara, Turkey

ASIA

Nguyen Thanh HaHanoi, Vietnam

ASIA

Preben HjortlundHanoi, Vietnam

ASIA

Faridah Abdul KadirKuala Lumpur, Malaysia

ASIA

Patrik LundShanghai, China

ASIA

John MadsenKuala Lumpur, Malaysia

ASIA

Vipin MalikNew Delhi, India

ASIA

Pradeep MallickMumbai, India

ASIA

Peter RasmussenSuzhou, China(Facilitator)

ASIA

Sridhar SampathChennai (Madras), India

ASIA

Lucien WangBeijing, China

ASIA

Poul WeberBangkok, Thailand

LATIN AMERICA

Paul CardwellSan José, Costa Rica

LATIN AMERICA

Peter KilianMexico City, Mexico

LATIN AMERICA

Per E. L. OlsenSão Paulo, Brazil

Communications Finance Department (FIN)

Niels Gravgaard LaursenDepartment Director

Alice BrøndumPersonnel Administrator

Lone Bjørn HansenChief Accountant

Knud Lundgaard-KarlshøjFinance Officer

1) Expected to open in the summer of 2007.

2) Stationed at IFU Copenhagen until April 2008 in connection with SIMI studies.

Mission, vision & strategy 3

Legal mandate 3

Statement by the Management 4

Independent auditors’ report 5

Executive summary 6

Financial highlights 7

Management’s review 9

Accounting policies 19

Income statement 23

Balance sheet 24

Cash flow statement 26

Notes 27

Active project portfolio 36

Compliance with CSR 49

Management 51

List of abbreviations 54

IFU Adviser Office (reporting to IMD)

ANNUAL REPORT 06

THE INDUSTRIALISATION FUND

FOR DEVELOPING COUNTRIES

Bremerholm 41069 Copenhagen K · DenmarkTel +45 3363 7500Fax +45 3332 [email protected] No. 23598612

T H E I N D U S T R I A L I S A T I O N F U N D F O R D E V E L O P I N G C O U N T R I E S

BU

CHS.

DK

Danish International Investment Funds

Danish International Investment Funds is the umbrella term for IFU, IØ and IFV.

Each of the Funds operates in its specific geographical sphere:

• IFU in developing countries with a per capita income below 80% of the World Bank’s upper limit for new

loans with maturities of 17 years (USD 2,772 in 2007) and South Africa, Botswana and Namibia

• IØ in the Russian Federation, Ukraine and Belarus

• IFV in developing countries with a per capita income originally above the IFU limit

(IFV has stopped making new investments)

European cooperation

IFU, IØ and IFV are members of the European Development Finance Institutions (EDFI). Besides the

Danish Funds, there are 14 other members. They are all bilateral finance institutions offering capital for the

development of the private sector in developing countries, and countries that are in a transition process

towards market economy. The objective of EDFI is to further cooperation and to safeguard common interests

in relation to the European Commission and its institutions, including the European Investment Bank (EIB).

EDFI website: www.edfi.be

HEAD OFFICE: Copenhagen - OFFICES: Beijing · Johannesburg · Moscow · Nairobi (expected to open in the summer of 2007) · New Delhi ADVISER OFFICES: Cape Town · Kiev · Warsaw - ADVISERS: Accra · Ankara · Bangkok · Beijing · Budapest · Cairo · Chennai · Copenhagen Dakar · Hanoi · Johannesburg · Kaliningrad · Kiev · Kuala Lumpur · Lagos · Lahore · L’viv · Maputo · Mexico City · Moscow · Mumbai Nairobi · New Delhi · Novosibirsk · Plovdiv · San José · St Petersburg · São Paulo · Shanghai · Suzhou · Washington D.C.

THE INDUSTRIALISATION

FUND FOR DEVELOPING

COUNTRIES (IFU)

Bremerholm 4

1069 Copenhagen K

Denmark

Tel: + 45 3363 7500

Fax: + 45 3332 2524


www.ifu.dk

IFU-BEIJING

Room 1808,

China Travel Service Tower

No. 2, Beisanhuan

East Road

Beijing 100028

China

Tel: + 86 10 6460 9797

Fax: + 86 10 6460 9799


IFU-CAPE TOWN

(ADVISER OFFICE)

32 Belmont Avenue

Oranjezicht 8001

Cape Town

South Africa

Tel: +27 (0)21 465 5701

Fax: +27 (0)86 685 5602


IFU-JOHANNESBURG

Ground Floor, West Court

Sandown Village

16 Maude Street

Sandown 2196

P.O. Box 41934

Craighall 2024

Johannesburg, South Africa

Tel: + 27 11 783 1070

Fax: + 27 11 783 1071


IFU-NEW DELHI

SPWD Building, 2nd floor

14 A, Vishnu Digambar Marg

(Rouse Avenue Lane)

New Delhi – 110002

India

Tel: + 91 11 2321 7160

Fax: + 91 11 2321 7167


IFU Offices

danish international investment funds · morten mikkelsen investment manager martin rømer...

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