THE INDUSTRIALISATION FUND FOR DEVELOPING COUNTRIES

Annual Report 2004

DANISH INTERNATIONAL INVESTMENT FUNDS CONTENTS

Legal mandate 3 Statement by the Management on the annual report 4 Auditors’ report 5 Highlights 8 Management’s review 10 Accounting policies 19 Income statement for 2004 22 Balance sheet at 31 December 2004 22 Cash flow statement for 2004 24 Notes 25 Management 32 IFU evaluation 34 Danish investments in developing countries - seeking efficiency 36 Cooperation with SMEs 37 Globalisation package for SMEs 38 Statistics and accumulated accounts 39 Four examples of IFU investments 42 IFU as partner 45 IFU’s adviser network 46 European Financing Partners’ co-financing facility 48 Investment portfolio as at 31 December 2004 49 Organisation and staff 59

THE INDUSTRIALISATION FUND FOR DEVELOPING COUNTRIES Bremerholm 4 · 1069 Copenhagen K Denmark · tel +45 3363 7500 · fax +45 3332 2524 · [email protected] · www.ifu.dk CVR No. 23598612 S UnitedStates dollar UnitedNations Smallandmedium-sized enterprises Scandinavian InternationalManagementInstitute USD Occupationalhealthandsafety UN Organisation forEconomicCooperationandDevelopment SME OfficialDevelopmentAssistance SIMI Non-governmentalorganisation OHS OECD NordicEnvironmentFinanceCorporation TheEnvironmentalInvestmentFacilityforCentralandEasternEurope TheInvestmentFundforCentral andEasternEurope ODA NGO Internalrateofreturn NEFCO InternationalMonetaryFund MIØ International Labour Organisation IØ TheInvestment FundforEmergingMarkets IRR TheIndustrialisationFundforDevelopingCountries IMF InternationalFinanceCorporation ILO HumanRightsComplianceAssessment IFV GrossNational Product IFU GrossNationalIncome IFC ForeignDirectInvestment HRCA Euro GNP EuropeanUnion GNI EuropeanInvestmentBank FDI EuropeanDevelopment FinanceInstitutions EUR EuropeanBankforReconstructionandDevelopment EU Danishkroner ConfederationofDanishIndustries EIB EDFI DevelopmentFinanceInstitutions EBRD DKK DanishInternationalDevelopmentAssistance CommonwealthofIndependentStates DI AfricanProjectDevelopmentFacility DFI Danida CIS APDF List ofabbreviations trade andindustry.” been createdtopromoteinvestmentsinthesecountriescollaborationwithDanish “For thepurposeofpromotingeconomicactivityindevelopingcountries,IFUhas Legal mandate The ActonInternationalDevelopmentCooperation, The DanishParliament,7June1967.

IFU Annual Report 3 IFU Annual Report 4 Frank NormanLarsen,DeputyManagingDirector Sven Riskær, ManagingDirector Executive Board: sults ofoperationsandcashflowsfortheyearended31December2004. annual reportgivesatrueandfairviewoftheFund’s assetsandliabilities,financialposition,re- an assessmentoftheFund’s financialposition. Againstthisbackground,itisouropinionthatthe sonable. To thebestofourbelief,annualreportincludesinformationwhichisrelevantfor governing reportingclassCenterprises(large). The annualreporthasbeenpresentedinaccordancewiththeDanishFinancialStatementsAct December 2004.Theannualreportwasdiscussedandadoptedontoday’s date. The ExecutiveandSupervisoryBoardshavepresentedtheannualreportforyearended31 the annualreport Statement bytheManagementon We considertheaccountingpoliciesusedappropriateandestimatesmaderea- Karen Wermuth Carsten Staur Michael Rasmussen Kjeld Ranum Lars Kolte Elsebeth Budolfsen Sigurd Ø.Andersen Lars Andersen Agnete Raaschou-Nielsen,DeputyChairman Johannes Poulsen,Chairman Supervisory Board: Copenhagen, 24February2005 audit alsoincludesassessingtheaccountingpoliciesused ing theamountsanddisclosuresinannualreport.An dit includesexamining,onatestbasis,evidencesupport- the annualreportisfreeofmaterialmisstatement.Anau- and performtheaudittoobtainreasonableassurancethat Auditing Standards.Thosestandardsrequirethatweplan We conductedourauditinaccordancewithDanish Basis ofopinion based onouraudit. express anopinionontheannualreport,pages4-33, Supervisory andExecutiveBoards.Ourresponsibilityisto accordance withtheDanishFinancialStatementsAct. year ended31December2004,pages4-33,presentedin We haveauditedtheannualreportofIFUforfinancial To theSupervisoryBoardofIFU Auditors’ report The annualreportistheresponsibilityofFund’s tt uhrsdPbi conatStateAuthorised PublicAccountant State AuthorisedPublicAccountant vn uln esnHenrik Barner Christiansen Svend DuelundJensen Financial StatementsAct. nancial yearthenendedinaccordancewiththeDanish of theresultsitsoperationsandcashflowsforfi- of theFund’s financialpositionat31December2004and In ouropinion,theannualreportgivesatrueandfairview Opinion reasonable basisforouropinion. report presentation.We believethatourauditprovidesa Executive Boards,aswellevaluatingtheoverallannual and significantestimatesmadebytheSupervisory Our audithasnotresultedinanyqualification. Statsautoriseret Revisionsaktieselskab Copenhagen, 24February2005 Danish SteelCluster, India Ernst &Young

IFU Annual Report 5 IFU Annual Report 6 projects, ofwhichDKK320.5mwasin30newprojects. tivities resultingintotalinvestmentsofDKK443.9m44 Also in2004IFUexperiencedahighlevelofinvestmentac- Main featuresat31December2004 tal standardsandsocialresponsibility. mitment togoodcorporategovernance,highenvironmen- dance withbusinessprinciplesandholdsastrongcom- and theManagingDirector. TheFundoperatesinaccor- Minister ofForeignAffairsappointstheSupervisoryBoard its liabilitytotheextentofnetworthonly. TheDanish veloping countries. purpose ofpromotingeconomicandsocialprogressinde- part ofarangeofficialDanishactivitieswiththeoverall countries incooperationwithDanishenterprises.IFUis veloping countriesbypromotinginvestmentsinthese IFU’s legalmandateistopromoteeconomicactivityinde- Main activities IFU isanindependent,self-governingentity, limitedin ibreet nldn ute 4459600.4 59.7 4.1 548.4 4,465.9 72 443.9 188.8 30.5 *) Exchangerate:EUR100=DKK743.81 4,079.2 has invested(1967-2004) Number ofcountriesinwhichIFU 44 1,404.4 528 financing (1967-2004) Disbursements includingfurther establishment (1967-2004) Investments innewprojectssince Investments during2004 Total equitycapitalat31.12.2004 Net income2004 ubrDK EURm*) Number DKKm end of2004. Fund’s equitycapitalwasreducedtoDKK1,404.4matthe After thecapitalextractionofDKK750min2004, cial institutions. 1967, andtoanextensivenetworkofadvisersfinan- ments inmorethan500projects72countriessince nancing, gainaccesstoIFU’s knowledgefrominvest- dends andprofitsfromsaleofshares. (2005). TheFund’s revenuesconsistofinterest,divi- ing countrieswithapercapitaincomebelowUSD5,295 vestments inproductionorservicecompaniesdevelop- tion, loansandguaranteesoncommercialtermsforin- By collaboratingwithIFU,thepartners,inadditiontofi- IFU providesadvisoryservices,sharecapitalparticipa- NEG Micon,India

IFU Annual Report 7 8

Highlights Annual Report IFU Financial highlights 2004 2003 2002 2001 2000 DKKm DKKm DKKm DKKm DKKm

INCOME STATEMENT

Gross contribution from projects 47 95 (19) 5 (11) Operating income (loss) 10 59 (54) (29) (43) Net income for the year 31 97 19 20 15

BALANCE SHEET 31 DECEMBER

Share capital investment in projects at cost 1,149 1,097 1,159 1,055 1,008 Project loans at cost 810 779 622 704 759 Total investment in projects at cost 1,959 1,875 1,782 1,759 1,767 Accumulated value adjustments (930) (919) (861) (734) (754) Investments in projects, net1 1,029 956 921 1,025 1,013 Cash and bonds 297 1,079 1,096 970 832 Repaid capital/paid in caital during the year (750) 0 0 0 150 Total equity capital 1,404 2,124 2,027 2,008 1,861 Total balance 1,436 2,193 2,066 2,056 1,878

ADDITIONAL DATA

New projects contracted (no.) 30 24 25 25 22 Portfolio of projects (no.) 216 208 212 212 207 Investments contracted 444 527 359 352 521 Investments disbursed 378 420 245 161 479

KEY RATIOS

Gross contribution from projects/Investment in projects at cost 2.42% 5.05% (1.08%) 0.27% (0.64%)

Operating income/Average total equity capital 0.56% 2.84% (2.65%) (1.49%) (2.45%)

Net income for the year/Average total equity capital 1.73% 4.67% 0.94% 1.05% 0.84%

Total equity capital/Total assets 97.82% 96.85% 98.09% 97.68% 99.06%

Accumulated value adjustments/Investment in projects at cost (47.47%) (49.01%) (48.31%) (41.72%) (42.65%)

Average number of full-time employees 75 80 81 78 80

1) The financial highlights have been restated for 2001 as a consequence of the changes in accounting policies effected in 2002. For 2000, the reserves against losses have been booked against the project assets when calculating the total balance. The financial highlights have been adjusted for 2000 - 2003 as a consequence of the changes in the presentation effected in 2004.

Developmental and environmental highlights - ex ante2

Total fulfilment of Fund's success criteria (Range: 25%-100%) 74% 67% 77% N.a. N.a. Development impact 76% 73% 79% N.a. N.a. Partner mobilisation 56% 54% 62% N.a. N.a. Sustainability and profitability of projects 86% 76% 87% N.a. N.a. Fund's operational targets 79% 64% 79% N.a. N.a. Environmental Investment Ratio (Range: 0 - 100%) 19% 45% 29% N.a. N.a.

2) Weighted by invested amounts (see text on new success criteria on page 10). Mission, Vision &Strategy with co-investmentstoenhance Danishenterprises’ To contributethroughinformationandadvice inconnection Vision: advantages. productive investmentsmakingoptimaluseofcomparative global flowofsociallyandenvironmentallyresponsible, more equitableincomedistributionthroughincreased To enhanceglobaleconomicgrowth,developmentand Mission: tries. ferred investmentpartnerindeveloping andreformcoun- experience andexternalfinancing aswelltheirmostpre- Danish enterprisesasacompetentproviderofknow-how, To becomeknown,recognisedandusedbyallrelevant Strategy: ments towardsdevelopingandreformcountries. active participationintheglobalflowofproductiveinvest- Staff seminar, Copenhagen2004

IFU Annual Report 9 IFU Annual Report 10 Management’s review Development inIFU’s areaofactivityduring2004 for 2004. in connectionwiththeapproval oftheDanishstatebudget ment. Thiscapitalextractionwas decidedbytheParliament In 2004IFUtransferredDKK 750m totheDanishgovern- Capital extraction China andIndia. production tocountrieswithlowerwagelevels,notably the tendencyofoutsourcingmostlabour-intensive pected tocontinueincreasingandconsequentlystrengthen competitive pressureonDanishenterprisesis,however, ex- ance ofpaymentsaswellonthepublicaccounts.The economy issoundwithasubstantialsurplusonthebal- 2005 withanexpectedgrowthrateof2.25%.TheDanish Economic Councilestimatesthatgrowthwillcontinuein growth rateforallof2003wasonly0.5%.TheDanish private consumption.Incomparisonthecorresponding to secondquarter2004,mainlydrivenbyanincreasein with aGNPgrowthrateof2.6%fromsecondquarter2003 Already theeconomicgrowthinDenmarkisaccelerating Expected growthinDenmark ing yearsaspartofthe“globalisationwave”. tries. Thelattertrendisexpectedtoaccelerateinthecom- panies outsourcinghigh-costproductiontothesecoun- there, whichwillhelpsafeguardcompetitivenessofcom- countries istomakeuseoftherelativelowcostsprevailing countries. Anotherimportantmotiveforinvestinginthese gain accesstothefastgrowingmarketpotentialinthese their investmentstowardsdevelopingcountriesinorderto trend whereDanishcompaniesdirectasubstantialpartof and 6.7%,respectively. IFUexpectsacontinuationofthe China andIndiathegrowthin2005isexpectedtobe7.5% all growthrateisexpectedtoreach5.4%in2005,while level of4.3%,whichisstillquitehigh.InAfricatheover- China. In2005theIMFexpectsgrowthratetofalla tionally rapidexpansioninemergingmarkets,notably 2004 withstronggrowthinindustrialcountriesandexcep- in 2003andisexpectedtoreacharecordhighof5%for According totheIMF, theworldoutputincreasedby3.9% Continued globalgrowth G G G three generalsetsofcriteriaunderthefollowingheadlines: success criteriafortheFund. visory Boardon29January2004decidedanewsetof Based onIFU’s Mission,Vision &Strategy, IFU’s Super- New successcriteria–exante early 2004. a staffreductionofapproximately10%,wereimplemented mind, significantsavingsinadministrativecosts,including 25m basedoncurrentinterestratelevels.With thisin for 2005andsubsequentyearsintheorderofDKK20- extraction willbeanestimatedreductioninIFU’s income system hasbeenintroduced.Anotherresultofthecapital for eachinvestment,andalsoastrictercashmanagement troduce amorerestrictivemaximumamountofDKK50m traction, IFU’s SupervisoyBoardfounditnecessarytoin- nancial contribution intheprojects. quantify theEnvironmentalInvestment RatioofIFU’s fi- cess criteria,ithasbeendecided toupdatethemethod modifications ofthesystemare presentlybeingconsidered. gether intoone“success”figure foreachproject.Minor success criteria,andmakesitpossibletoweighthemallto- deavours toquantifythefourelementswhichmakeup the termsforassessingenvironmentaleffects–whichen- staff satisfaction. ticipation inDanishforeigndirectinvestments(FDIs)and Fund’s ownprofitability, partnersatisfaction,relative par- The successofIFUwillalsobeassessedonthebasis In futureeachprojectmustbeevaluatedonthebasisof As aconsequenceofthedecisiontomakecapitalex- In connectionwiththeimplementation ofthenewsuc- Subsequently, asystemhasbeendeveloped– similar to for example,theviabilityofprojectsisassessed. Sustainability andprofitabilityofprojects–where, (additionality). contribution tomobilisationofDanishpartners Partner mobilisation–includesmeasuringIFU’s of knowledge. Development impact–e.g.jobcreationandtransfer page 8. and theresults werepresentedanddiscussed ataconfer- cided toimplementanumber oftherecommendations, and investedcapital…”. sized companies(SMEs)interms ofnumberprojects “increased attentionshouldbe giventosmallandmedium- countries, andtheevaluationteamalsorecommendsthat having investedenoughinthepoorestofdeveloping tionalisation. Danish companiestobecomesuccessfulintheirinterna- with itsinvestmentsIFUhastoahighdegreehelped ing countries.Theevaluationalsounderlinesthefactthat successful inpromotingeconomicactivitythedevelop- tonomous institution. emphasises thattheFundshallcontinueasanau- unique expertiseregardinginvestments,andfurthermore eration. ThereportconcludesthatIFUhasdeveloped number ofrecommendationsrelatedtoIFU’s modeofop- was carriedoutbyNordicConsultingGroup,whichmadea IFU receivedpraiseandcriticismintheevaluationwhich published attherequestofMinistryForeignAffairs. In August2004anindependentevaluationofIFUwas Evaluation ofIFU The figuresfortheyears2002–2004arepresentedon Based ontheevaluationIFU’s Supervisory Boardde- At thesametimeIFUiscriticizedinreportfornot According tothereportIFU’s investmentprojectsare EDFI organisationsandIFCwere alsopresent. Human Rights,whererepresentatives fromanumberof at aconferenceinMay2004 attheDanishInstitutefor ment decisions.Thequestions were discussedandselected regarding humanrightsrelevant inconnectionwithinvest- This modulecontainsthe28mostfundamentalquestions of DanishIndustriesinCopenhagenon23November2004. tool, waslaunchedataconferenceheldtheConfederation human rightproblems. special relevanceinthecountriesthatareknowntohave tion totheircompliancewithhumanrights.Thetestisof ables companiestotestandidentifycriticalareasinrela- more than350questionsand1,000indicatorsthaten- ment” (HRCA).Itisaninternetbasedquestionnairewith oping countries. ing ofhumanrightsaimedatcompaniesinvestingindevel- develop awebsiteandcomputerisedtoolforthemeasur- sisted theDanishInstituteforHumanRightsinitsworkto IFU andtheConfederationofDanishIndustrieshaveas- Assessment Quick CheckoftheHumanRightsCompliance der tofacilitatethecooperationbetweenSMEsandIFU. pared aso-called“Globali-sationpackage”forSMEsinor- ence aboutthesubject.Furthermore,Fundhaspre- In connectionwith IFU’s workforhumanrights,theFund A “QuickCheck”version,whichisthefirstmoduleof The tooliscalled“HumanRightsComplianceAssess- Verino Farms,Zambia

IFU Annual Report 11 IFU Annual Report 12 in newprojectswentto12countries.IFU’s averageinvest- going projectsamountedtoDKK123.4m.Theinvestments tal amountofDKK320.5m.Additionalfinancingin14on- ment activitywithinvestmentsin30newprojectsofato- In 2004IFUexperiencedacontinuedhighlevelofinvest- Investments in2004 collaboration withtheDanishTrade Council,theExport In theautumnof2004IFUandIØinitiatedaformalised New websiteforDanishcompanies–GoGlobal manrightsbusiness.org. charge, try–orjustreadaboutQuickCheckonwww.hu- of 2005.Untilthen,anyonewhoisinterestedcan,free tional NGOwithanti-corruptionfocus. Transparency InternationalDenmark–theleadinginterna- has beengivenaseatasobserverontheboardof The completeHRCAisexpectedtobereadyinthespring adi rmpoet K 215 U 37.9m EUR 281.5m DKK 11,947jobs 50.8m 59.7m EUR EUR 4.6m 378.0m DKK EUR 443.9m 70man-years DKK 34.3m DKK Estimated jobcreationinhostcountries Estimated employmenteffectinDenmark ofthisexport 30 Estimated Danishexportgeneratedfromtheinvestments Paid-in fromprojects 14 Disbursement ofsharecapitalandloans Investments innewandexistingprojects NEW PROJECTS Number ofadditionalfinancingexistingprojects Number ofinvestmentsinnewprojects oa netet K 1626 U 220.8m 43.1m EUR EUR 1,642.6m 320.5m DKK DKK Total investments IFU’s investments IFU’s SupervisoryBoardon18December2003. should becomparedwithatargetrateof70%decidedby capital andprojectloanswithequityfeatures.Thisfigure ment inthenewprojectsamountedtoDKK10.7m. is namedwww.GoGlobal.dk. companies tothemanypossibilitiesoutsideofDenmark, ganisations. advice onactivitiesabroadfromoneorseveraloftheor- ing howtheindividualcompanycanobtainassistanceand launched atthebeginningof2005withaguideexplain- Danish businesseswantingtobepartoftheglobalisation. organisations isanattemptatprovidingbetterassistanceto Credit FundandDanida.Thecooperationbetweenthefour 78% ofthenewinvestmentswasinformshare The website,whichwillserveasagatewayforDanish The initiativeincludesacommonwebsitetobe ScanCom, Vietnam 3CrtxTaln . 0.6 3.0 8.9 0.6 2.0 3.0 1.1 4.1 8.9 0.3 6.0 54.0 0.0 2.6 8.6 17.8 0.3 1.5# 1.4 2.0 8.6 1.1 15.7 17.8 Thailand Vietnam 6.0 54.0 1.4 SouthAfrica 0.0 9.1 Peru Malaysia Pakistan OranaVietnam 6.5 44 Malaysia Caretex Ghana 43 MorsøSA(Pty) India Ghana 42 DanperTrujillo 41 CamdenHolding China China 40 RoxulAsia 39 FibertexNonwovens Bangladesh 38 GlobalWool Alliance Brazil 37 LarsenGhana 36 GhanaEmulsion 35 GPV(Suzhou)Co. 34 CodanLingYun 33 DanicaTermoindustrial 32 KAFCO(Plant) 31 9Boe eeul . . 81 150 3.3 250 1.4 60 22 5 3.3 130 480 28.2 5 1.4 12.6 13 1.0 70 2.0 3.9 28.2 16.6 50 12.6 2.0 0.3 4,000 6 75 25 1.0 1,000 0.6 2.0 48 2.0 7.2 4.2 30 2.0 5.6 0.3 Venezuela 3.8 4.2 0.6 0.6 243 1.5 1.9 Vietnam 7.2 16.6 4.2 5.4 5.6 3.8 4.2 1,372 0.6 48.6 Turkey Togo SouthAfrica 2.0 Thailand Topas EcoLodge Thailand 39.7 30 Thailand Bioven 29 Radisson SAS Ortaköy SouthAfrica 28 LoméTerminal Services SouthAfrica 1.5 Thailand 27 Tricon ThaiAutomation 3.4 26 GPVAsia (Thailand) Co. 25 FluxInternational 24 48.6 EnergyMaintenance Serv. Nigeria Mozambique 23 SouthAfrica Virogates India 22 India NyatiSouth Africa India 39.7 21 Euromatic 20 China DanishThatching Company 19 India Emperion West Africa 18 NyatiMozambique 17 China Group4Guarding 16 Group4Falck India 15 Group4Cash 14 China DanishSteelCluster 13 UlvecoChina 12 Tibet LhasaBrewery 11 LanzhouHuangheJianiang 10 lx uhuFriueCia5353120 100 400 1,500 1,400 5.3 6.7 60 180 60 5.9 41.9 39.1 5.3 12 16.4 9.1 2.9 0.6 9.1 6.7 2.9 41.9 5.9 39.1 0.6 16.4 China China China China China FlexaSuzhouFurniture China 9 ECCOTannery (Xiamen)Co Brazil 8 ECCOShoefactory China 7 ECCO(Xiamen)Co. 6 CarlsbergQinghai Bolivia 5 AnqingWhiteCement 4 AVK SealingTechnology 3 ScanComdoBrasil 2 CheckPointLatinAmerica 1 on-going projects Further financingof New projects Investments contractedin2004 Project name oa**7. 23123.4 443.9 52.3 151.2 71.1 292.7 Grand total*** Total*** oa**2169. 2. 11,947 320.5 98.9 221.6 Total*** )ic.oerncmimns*)ic.gaate *)oasmyntadu u orudn p#)conversionfromloanstoshares ***)Totals maynot addupduetorounding up **)incl.guarantees *) incl.overruncommitments onr hrs on* Total Loans** Shares* Country IFU's investmentsinDKKm 23 projectswere exited in2004 employment Expected (persons)

IFU Annual Report 13 IFU Annual Report 14 Facts aboutthestaff Offices abroadandadvisernetwork Knowledge andhumanresources employees in2004was75. emerging markets,respectively. Theaverage numberof which operateinCentralandEasternEuropethe IFU isthefundmanagerforitssisterfunds,IØandIFV, it possibleforasignificantpartoftheITdevelopmentto the officeinIndiahasbeenstrengthened.Thismade Johannesburg, SouthAfrica.During2004theITstaffat ties, legislation,businesses,etc. with theirthoroughknowledgeofthelocalareas,authori- visers istopromoteandmonitortheprojectsbyassisting knowledge resources.Themaintaskoftheofficesandad- offices abroadandtheadvisershelpsstrengthen The relationshipbetweentheheadofficeinDenmark, gaged abroadbyIFUoritssisterf work tothebenefitofprojectswithIFUparticipation. can beutilisedinthebestpossiblewayday-to-day staff andtoadjusttheframeworksothatacquiredskills network ofadvisers. the staffinCopenhagen,officesabroadandwithin resource. IFU’s knowledgeistoalargeextentembeddedin therefore beenplacedonmaintaininganddevelopingthis Knowledge isoneofIFU’s majorassets.Emphasishas 55% Female 79% Employedattheheadoffice IFU hasofficesinBeijing,China,NewDelhi,Indiaand Since thebeginningof1990s,adozentraineesen- It isimportanttomaintainandcontinuouslydevelopthe unds (IØandIFV)have 45% Male ple participated. and managersinIFU’s projectsinChina.Atotalof17peo- board workandCorporateGovernanceformembers changing viewsandconsolidatingacommonteamspirit. in Copenhagen.Thisprovidedagoodopportunityforex- convened in2004toattendaoneandhalfdayseminar national ManagementInstitute(SIMI)inCopenh completed anMBADegreeattheScandinavianInter- page 10). consequences ofthecapitalextraction(asdescribedon staff reductioninCopenhagenordertoadaptthe tached toIFU. Cape Town becameoperationalinlate2004. and LatinAmerica,respectively. Thenewadviserofficein Brazil, contributetotheadministrationofprojectsinAfrica Lomé, Togo, CapeTown, SouthAfricaandSãoPaulo, in sharinglocalstaff. eration withNorfund,IFU’s Norwegiansisterorganisation, take placethere.InJohannesburgIFUhasstartedacoop- Also in2004,aseminarwasorganisedbyIFUBeijingon The entirestaffoftheFundsandanumberadvisers The beginningof2004wasmarkedbyasignificant At year-end 2004,36advisersin18countrieswereat- In additiontotheofficesabove,threeadviserin 21% EmployedoutsideDK agen. G G G G tional agreementsandconventions,suchas: the Fundutilisesanumberofmostimportantinterna- to heightenstandardswithinallthoseareas.Asreference IFU shallincooperationwithitspartnersconstantlystrive health andsafetyaswellenvironment. tion tohumanrights,socialresponsibility, occupational and standardsfortheworkofprojectcompaniesinrela- Fund haselaboratedaCodeofConduct,whichsetsthegoals and safetyoftheemployeesthaninDenmark.Therefore, there areotherrulesandstandardsfortheprotection,health In mostcountrieswhereIFUanditsDanishpartnersinvest, social andhumanrights Investments heightenstandardsfor some requirementsaremandatory: on cooperationbetweentheFundanditspartners,while it andintendtoactuponit.IFU’s CodeofConductisbased signature theyconfirmthathavebeenmadeawareof made awareoftheFund’s CodeofConduct,andbytheir Before IFUdecidestoenterintoaproject,thepartnersare The OECDConventiononcombatingbribery. employment andprotectionoffreedomassociation. against childlabour, non-discriminationconcerning conventions forabolitionofforcedlabour, protection ILO’s (TheInternationalLabourOrganisation) of HumanRightsandFundamentalFreedoms. The CouncilofEuropeConventionfortheProtection Human Rights. The UnitedNationsUniversalDeclarationof G G G G G G of operation. dards insomeareasthanwhatiscustomarythecountry Code ofConduct,andmanyturnouttokeephigherstan- All projectsareassessedonceayearinrelationtoIFU’s must beprotected. Furthermore, theemployees’freedomofassociation political belief,religionorsocialorigin. equally, regardlessofgender, race,disability, crimination ofanykind.Everyonemustbetreated the projectdoesnotexposeemployeestodis- In additiontothisitisveryimportantIFUthat work whichmaybemorallyorphysicallyharmful. their schoolattendance,andiftheydonotcarryout children mayonlybeemployedifitdoesnotaffect carried outbychildrenundertheageof14.Older child labour. Undernocircumstancesmayworkbe IFU willnotsupportnoracceptforcedlabouror the conventionswhichhostcountryhasratified. meet thestandardsadoptedinhostcountry, and evaluated againstDanishstandards,butinallaspects IFU’s baserequirementisthatinvestmentsshouldbe able. Using briberyisbothacriminaloffenceandunaccept- certain ethicalstandards. and thatlargesupplierstotheprojectalsomeet being belowthelegalminimumofhostcountry, At thesametimeIFUputsemphasisonwagesnot Huhhot HuaOuStarch, China

IFU Annual Report 15 IFU Annual Report 16 Mostly “acceptable”performance–CodeofConduct remedy theproblems. try toidentifytheproblems,inordermakeaneffort though thisisonlyafew, IFUfindsitunacceptableandwill ects wereclassifiedas“critical”or“poor”,andeven 74 oftheprojectswereclassifiedas“fair”.Two oftheproj- projects assessedwereclassifiedas“good”or“excellent”. projects inrelationtotheCodeofConduct,70out146 space forimprovements.InIFU’s annualassessmentofthe up toIFU’s CodeofConduct,althoughthereisstillample As inpreviousyears,2004showedthatmostprojectslive lent”. Regardingexternalenvironment, 140projectsoutof from “critical”over“poor”,“fair”, and“good”to“excel- (OHS) conditions.Onceayear the projectsaregivenmarks sessment ofthestatusforoccupational healthandsafety mental classificationofallIFU projectsincludinganas- sesses, theAESRformsbasisforaninternalenviron- knowledge oftheproject,whichIFU’s representativepos- ing monitoringoftheprojects.Together withthein-depth for improvement.ThisreportbecomespartofIFU’s ongo- company, inorderfortheboardtoidentify possibleneeds Environmental StatusReport(AESR)fortheboardof environmental policyin1996mustprepareanAnnual as aframework. forestry whereDanishrulesandregulationscannotbeused Bank sectorguidelinesareapplied,e.g.withintropical largest environmentaleffects.Atthesametime,World dure, underwhichtheAprojectshavepotentially according totheWorld Bankenvironmentalreviewproce- made. IFU, andaplantoimprovethedeviantareasmustbe rules. Anydeviationsmustbedescribedandapprovedby Danish environmentalandoccupationalhealthsafety firm toIFUthattheprojectmeetsstandardsof ulations ofthehostcountry, theDanishpartnerhastocon- company beingobligatedtocomplywiththerulesandreg- safety standardintheprojects.Inadditiontoproject ing ahighenvironmentalandoccupationalhealth IFU haselaboratedapolicywhichwillcontributetoensur- occupational healthandsafety(OHS) Focus ontheexternalenvironmentand Project companiesinitiatedaftertheapprovalofIFU’s The projectsarecategorisedaseitherA,BorC ities foraddressingtheproblemsdifficult. encing severefinancialproblems,whichmakethepossibil- “poor” environmentalperformance.Thisprojectisexperi- was classifiedas“poor”,whichisthesameprojectwith sessed wereclassifiedas“fair”orbetter. Onlyoneproject 2004. Onlyoneprojectwasclassifiedaspoor. 141 projectsassessedwereclassifiedas“fair”orbetterin Regarding OHS,140projectsoutof141as- G G G G G Code ofConduct G G G G G OHS G G G G G External Environment Critical Poor Fair Good Excellent Critical Poor Fair Good Excellent Critical Poor Fair Good Excellent Financial review2004 Risk management investment policy. Thesepoliciesincludeguidelinesfor a setofriskpolicieshavetherefore beenimplementedinthe mercial riskintheprojectsisoften high. nomic conditionsfromtimeto time,andfurther, thecom- some ofwhichareexperiencingturbulentpoliticalandeco- IFU investsinprojectslocateddevelopingcountries, DKK (44.0)mcomparedto(6.5)min2003. lio ofsharecapitalinvestmentsatyear-end contributed major partoftheproceedsasdividendincome. part attributabletoadivestmentwhereIFUreceivedthe 59.6m ascomparedtoDKK20.3min2003,isforalarge come, i.e.positivevalueadjustments,inpreviousyears. been foreseenfor2004,andhadthusbookedasin- itive contributionfromdividendsanddivestmentshad Compared to2003,amuchhigherproportionofthepos- a farbetterresultthanhadpreviouslybeenexpected. that IFUeffectedanumberofsharesalesinyearwith tion. Contributingtotheverygoodresultfor2003was fair valuemadeinprioryearsontheinvestmentsques- the figuresarenetofreversaladjustmentstoassessed from DKK144.4min2003.Netcontributionmeansthat share capitalinvestmentsfelltoDKK74.6min2004 bution fromrealisedtransactions,dividendsanddivested son forthisdevelopmentisprimarilythatthenetcontri- DKK 30.6mcomparedto137.9min2003.Therea- timates forvalueadjustmentsinthatyear. pacted byDKK21.0mduetoachangeinaccountinges- 94.8m in2003.Thefigurefor2003waspositivelyim- activities wasDKK47.5min2004comparedto 20.6m. anticipated. Thenetfinancialincomefor2004wasDKK ment in2003,tookplaceatalatertimeoftheyearthan of DKK750m,whichwasdecidedbytheDanishgovern- than expectedfinancialincome,asthecapitalextraction than ex below IFU’s resultfor2004wasaprofitofDKK30.5m,whichis To minimisetheoverallriskin IFU’s investmentportfolio, Value adjustmentsmadethroughtheyearonportfo- The muchhigheramountofdividendsin2004,DKK Total contributionfromsharecapitalinvestmentswas Total contributionfromIFU’s primaryproject-related the profitofDKK96.9min2003,butstillbetter pected ayearago.Thisismainlyduetobetter ital extractionwasreducedto DKK 50m,whereas tion inasingleproject,whichas aconsequenceofthecap- investments plusremainingand bindingcommitments(to- a resultofthecapitalextraction. rates andashorterinvestmenthorizonthroughtheyearas reflects thecombinedeffectoflowershortterminterest 2003. Thelowernetfinancialincomein2004primarily expenses wasDKK20.6mcomparedto37.9min out in2004. the savings,includingstaffreductions,thatwerecarried the reducedoveralllevelofexpensesisaconsequence from DKK69.6min2003.Asalsoexplainedelsewhere, portion ofthetotalexpensesasthesefelltoDKK66.7m crease reflectsthatin2004IFUwasallottedahigherpro- DKK 37.6mcomparedto35.8min2003.Thein- and theInvestmentFundforEmergingMarkets(IFV),was the InvestmentFundforCentralandEasternEurope(IØ) the threefundsmanagedbyIFU,whichbesidesIFUare formation onIFU’s currentUSDexposure. scribed underRiskmanagementbelow, andincludesin- when comparedto2003.IFU’s hedgingpolicyisde- ily, decelerationinthefallofUSDversusDKK2004 The improvementislargelyduetothe,atleasttemporar- were DKK(23.6)min2004versus(43.2)m2003. nated loans,netoftheeffecthedgingarrangements, ments onloansinforeigncurrencies. provisions forfuturelossesandexchangerateadjust- on theportfolioofprojectloansandguaranteesconsist (31.8)m versusDKK(80.2)min2003.Value adjustments justments wasmuchbetter, albeitstillnegative,DKK 2003, DKK37.8m,butthecontributionfromvaluead- fees for2004atDKK38.7mwasparwiththefigure in 2004fromDKK(41.0)m2003.Interestincomeand guarantees improvedconsiderablyin2004toDKK17.0m lines formanagingthedirectfinancialrisk. project, partnerandpoliticalriskexposureaswellguide- risk Project risk risk Project As mentionedabove,Financialincome,netoffinancial IFU’s partoftheoveralloperatingexpensesfor2004 Exchange rateadjustmentsonprimarilyUSDdenomi- Total contributionfromprojectloansandoutstanding is limitedthroughtheconstraint thattotaloutstanding is managedbythelimitforIFU’s participa- Partner

IFU Annual Report 17 IFU Annual Report 18 Outlook for2005 value adjustments. should normallynotexceed30%oftheFund’s equityplus as aguidelinethetotalengagementinsinglecountry pending, amongotherthings,onthisrating.Furthermore, mium isaddedtotheinterestonloansgrantedbyIFU,de- using ratingsfrom“InstitutionalInvestors”,andariskpre- to come.Danish companiescontinuetoshow strongand optimistic aboutthelevelofactivity in2005andtheyears result intheyearstocome. will haveanegativeimpacton theFund’s incomeandnet the Danishstatebudgetin2004. Thecapitalextraction government’s decisiontoextractDKK750mfromIFU the limitedresourcesofFundcausedbyDanish more restrictiveoperationalactivitiesasaconsequenceof For IFU,2005andsubsequentyearswillbemarkedby have takenplacesincethebalancesheetdate. No eventsmateriallyaffectingthefinancialpositionofIFU Events afterthebalancesheetdate exceed 15%oftheFund’s equityplusvalueadjustments, policy forhedgingstatesthattheexposureinUSDmustnot icy isimplementedinordertoreducethisexposure.The fluctuations intheUSD/DKKexchangerate.Ahedgingpol- nancial resultisthereforetoalargeextentdependenton folio atyear-end wasdenominatedinUSD,andIFU’s fi- 51% oftheexchangerateadjustedoutstandingloanport- risk Financial adjustments. The account formorethan20%oftheFund’s equityplusvalue tal engagement)withapartner(atgrouplevel)shouldnot Total engagementat31/12/2004dividedoncountriesrelativetotheFund’s equityplusvalue 10% 12% 14% 16% 18% 0% 2% 4% 6% 8% In spiteofthecapitalextraction thereisstillreasontobe o noeCutis(N 75prcp o ideIcm onre GI<$,7 e a)UpperMiddleIncomeCountries(GNI< LowMiddleIncomeCountries(GNI<$2,975percap) Low IncomeCountries(GNI<$745percap) hn ni aasaEytTre iei rzlPksa Bangladesh Pakistan Brazil Nigeria Turkey Egypt Malaysia India China adjustments (aftercapitalextractionofDKK750m) political (or country) risk country) (or political is assessedby Thailand 10% 12% 14% 16% 18% management” above),bynature isverydifficulttopredict. fects ofexchangeratefluctuations (seethesection“Risk value oftheinvestmentsmade byIFU,includingtheef- certainty, primarily becausethedevelopmentinfair that thebudgetednetresultis subjecttosubstantialun- ative netresultisbudgeted.Itshouldbenoted,however, to beonthesamelevelasin2004.In2005aslightlyneg- Therefore, thenumberofnewprojectsin2005isexpected increasing interestininvestingdevelopingcountries. term fluctuationsinthecashflows. DKK 300misinplacetocoverunexpectednegativeshort- positive cashposition.AcreditfacilitysharedwithIØof est rateswillthereforehaveapositiveeffectonIFU’s result. ner andpoliticalrisk.AnincreaseintheCIBOR/LIBORinter- mium dependentontheFund’s assessmentofproject,part- IFU’s standardinterestterms,CIBOR/LIBOR,plusariskpre- end wasplacedinprojectloans,ofwhich89%isbasedon change rateadjustedoutstandingloanportfolio. and EURattheendof2004wasverylow1%ex- hedged. IFU’s exposuretocurrenciesotherthanUSD,DKK end of2004approximately23%theUSDexposurewas loan principalswithanestimatedlowriskofdefault.Atthe should normallynotexceed75%.IFUonlyhedgesproject and thatthehedgedportionoftotalUSDoutstanding 0% 2% 4% 6% 8% Total engagementat31/12/2004dividedonpartnergrouprelativetotheFund’s equityplus Liquidity ismanagedwiththeaimofalwayssecuring 41% ofIFU’s totaloutstandinginvestmentatcostyear- ..Møller- A.P. Mærsk Portland Aalborg value adjustments(aftercapitalextractionofDKK750m) F.L. Smidth SAS Fibertex Vestas Rockwool Carlsberg Ecco Sko Ecco Carlsberg Rockwool Vestas Fibertex SAS Smidth F.L. $5,295percap) Topsøe Haldor ects” hasbeen dividedinthreeseparatesections inorder notes 7and8. amount toDKK20.6mandDKKm 21.6m,respectively. measured atfairvalue.For2004 and2003thereductions reduced bytheamountofoutstandingsyndicatedcapital, 2004 or2003;however, thebalancesheettotalhasbeen net effectonIFU’s netincomeorcashflowforeither an identicalexpenserelatedtosyndicatedcapital. and cashflowstatements,e.g.asgrossprojectincome related totheseassetswereshownseparatelyintheincome tical sizedliability. Similarly, alltransactionsduringtheyear related syndicatedcapitalwasshownseparatelyasaniden- ital wereincludedatfairvalueinthebalancesheet,and from theseprojects. only becomesduetotheextentthatIFUreceivespayment own accountandrisk,syndicatedcapitaltherefore third partiesandinvestedinprojects,principleontheir assets andtransactions,whichtheysyndicate. cated capitalhavebeennettedoutagainstthegrossproject been modifiedcomparedtolastyear. ment, thebalancesheetandcashflowstatementhave classification oftheindividualitemsinincomestate- tion valueofIFU’s annualreport,thepresentationand nancial positionofIFUandtofurtherincreasetheinforma- Statements Act. currence withsection23(4)oftheDanishFinancial tion tothereaderofaccounts.Thedeviationisincon- and withaviewtothebestpossibleclarityofinforma- character asaninvestmentfund(longterminvestments), because theyarepresentedonthebasisofIFU’s special standard tablesoftheDanishFinancialStatementsAct, IFU’s incomestatementandbalancesheetvaryfromthe Presentation andclassification previous year. The accountingprinciplesappliedarethesameasfor Accounting policiesingeneral Financial StatementsActgoverningreportingclassCenterprises(large). This annualreporthasbeenpreparedinaccordancewiththeprovisionsofDanish Accounting policies In theincomestatement,“Gross contributionfromproj- Information aboutsyndicated capital isnowincludedin The changeinpresentationofsyndicatedcapitalhasno Previously, projectassetsacquiredusingsyndicatedcap- Syndicated capitalisinvestmentreceivedfrom This year, allliabilitiesand In ordertomakethebestpossiblepresentationoffi- transactions related to syndi- Recognition andmeasurement adjustments, including thosethatariseat the payment change rateatthebalancesheet date.Allexchangerate the balancesheetdate,areadjusted intoDKKusingtheex- nated inforeigncurrencies,which havenotbeensettledat receivables, payablesandother monetaryitemsdenomi- DKK usingtheexchangerateat thetransactiondate.Loans, Foreign currencytransactionsareinitiallyrecognisedin Foreign currencyadjustment recognised intheincomestatementasvalueadjustments. Value adjustmentsoffinancialassetsandliabilities are nised bytheamountsattributabletothisfinancialyear. the incomestatementwhenearned,justascostsarerecog- measurement. the balancesheetdateisconsideredatrecognitionand confirms orinvalidatesaffairsandconditionsexistingat finalising thepresentationofannualreport,andwhich fected asdescribedbelowforeachitem. at cost.Adjustmentsubsequenttoinitialrecognitionisef- can bemeasuredreliably. fits willflowoutoftheFund,andvalueliabilities prior event,anditisprobablethatfutureeconomicbene- Fund hasalegalorconstructiveobligationasresultof reliably. and providedthatthevalueofassetscanbemeasured able thatfutureeconomicbenefitswillflowtotheFund, Assets arerecognisedinthebalancesheetwhenitisprob- the incomestatement. This typeofinformationwaspreviouslygiveninanoteto different contributionsmakingthenetincomeforyear. ects atyear-end; therebygivingmoreinformationaboutthe year andintoadjustmentsrelatedtotheportfolioofproj- statement -relatedtorealisedgainsandlossesduringthe year havebeendividedinreversals-directlytheincome value adjustments,incomeandexpenses. investments, 2)projectloansandguarantees3)other to betterhighlightthecontributionsfrom1)sharecapital Income otherthanvalueadjustmentsisrecognisedin Information broughttoIFU’s attentionbeforethetimeof On initialrecognitionassetsandliabilitiesaremeasured Liabilities arerecognisedinthebalancesheetwhen Further, thechangesinvalueadjustmentsduring

IFU Annual Report 19 IFU Annual Report 20 Interest incomeonloansandcommission onguaranteesto Interest incomeandfeesrelated toprojects Contribution fr if any, ondividendreceivables. unrealised exchangerateadjustmentsandrealisedlosses, dend receivablesincludeprovisionforlosses,realisedand ments outstandingatyear-end. Value adjustments,divi- fair valuemadeduringtheyearonsharecapitalinvest- Value adjustments,portfoliocomprisealladjustments to receivables Value adjustments,portfolioanddividend capital writtenoff. in thesamewayasIncomefromsaleofsharesandShare divested duringtheyeararestatedrelativetocostinDKK, to thebeginningofyearonsharecapitalinvestments Reversals ofplusvaluesandprovisionforlossesmadeprior losses (divestedsharecapitalinvestments) Reversed plusvaluesandreversedprovisionfor recognised asincomeatthedateofdeclaration. Dividends fromprojectsnetofwithholdingtaxes,ifany, are Dividends fromprojects Contribution fr Income statement hedging ofreceivablesfromsaleshares. income andexpensesrelatedtoprojects,net”,if to hedgingofprojectloans,or“Othervalueadjustments, “Value adjustments,portfolioandreceivables”,ifrelated ments arerecognisedintheincomestatementaseither payables. ments arerecognisedunderotherreceivablesor quently adjustedtofairvalue.Derivativefinancialinstru- nancial instrumentsaremeasuredatcostandsubse- from saleofshares(fairvaluehedge). concerning selectedforeigncurrencyloansandreceivables ative financialinstruments)tohedgefuturetransactions ward exchangecontractsandcrosscurrencyswaps(deriv- IFU hasestablishedasetofcriteriaforenteringintofor- Derivative financialinstruments pending ontheirnature. justments, financialincomeorexpenses,de- date, arerecognisedintheincomestatementasvaluead- Changes inthefairvalueofderivativefinancialinstru- On initialrecognitioninthebalancesheet,derivativefi- om pr om shar oject loansandguarantees e capitalinvestments interest, guaranteecommissionandfeereceivables. change rateadjustmentsandrealisedlosses,ifany, onloan include provisionforlosses,realisedandunrealisedex- on projectloanprincipals.Value adjustments,receivables and unrealisedexchangerateadjustmentsduringtheyear guarantees outstandingatyearend,aswellallrealised fair valueduringtheyearonprojectloanprincipalsand Value adjustments,portfoliocomprisealladjustmentsto Value adjustments,portfolioandreceivables change ratesprevailingatthatdate. before, i.e.basedonthevalueofloansadjustedtoex- stated attheirvalueinDKKasitwastheendofyear currency, fullyorpartlywrittenoffduringtheyear, are prior tothestartofyearonloanprincipalsinforeign Reversals ofprovisionforlosses(loanswrittenoff)made Reversed provisionforlosses(loanswrittenoff) rate atthedateofwrite-off. stated inDKKatavaluecorrespondingtotheexchange Write-offs onprojectloanprincipalsinforeigncurrencyare Project loanswrittenoff justments oncashandbankcharges. and lossesonbonds,interestexpenses, exchangeratead- on cashandbonds,realised unrealisedcapitalgains Financial incomeandexpensescompriseinterest Financial incomeandexpenses distribution key. tween IFU,IØandIFVaccordingtoanactivitydependent lated tooperatingactivities,aredividedatyear-end be- tal operatingexpensesincurredbyIFU,netofincomere- The InvestmentFundforEmergingMarkets(IFV).to- Investment FundforCentralandEasternEurope(IØ) gether threefunds.AtpresentthisincludesIFU,The IFU managestheadministrationandaccountingofalto- Operating expenses,net grants toprojectsandvariousexpenses. fees, recognisedwhenearned.Otherexpensesinclude come onreceivables,recognisedwhenaccruedandother alised losses,ifany. Otherincomeincludesinterestin- alised andunrealisedexchangerateadjustmentsre- ables fromsaleofshares,includingprovisionforlosses,re- value onotherprojectrelatedreceivables,primarilyreceiv- Other valueadjustmentscomprisealltofair related toprojects Other valueadjustments,incomeandexpenses when earned. project loansandguaranteesarerecognisedasincome projects arerecognisedastheyaccrued.Feesrelatedto ance sheetdateexceptforcalled bonds,whicharestated Bonds arestatedattheofficial pricesquotedonthebal- Cash andbonds receivables frombonds,bothmeasuredatcost. other receivablesareadministrativeand rates andafteradjustmentsforriskofloss.Includedin ables aremeasuredatfairvalue,i.e.actualexchange Interest receivablerelatedtoprojectsandotherreceiv- receivables Interest receivablerelatedtoprojectsandother income statementatthetimeofacquisition. than DKK50,000perunitarerecognisedascostsinthe under operatingexpenses,net. years. Depreciationisrecognisedintheincomestatement timated usefullifeofthefixedassetvaryingfrom3to5 cost lessaccumulateddepreciationandimpairmentlosses. Fixed assetsandleaseholdimprovementsaremeasuredat Fixed assetsandleaseholdimprovements an assessmentofeachindividualproject. points relativetotheexchangerateadjustedvaluebasedon on projectloansaremeasuredinstepsof25percentage commercial andpoliticalrisksinvolved. any, thefinancialsituationofprojectcompany, and ments takeintoaccountactualexchangerate,security, if value adjustmentsrelativetocostinDKK.Theseadjust- Fair valueofprojectloansismeasurednetorincluding Project loans,net on anassessmentofeachindividualproject. steps of25percentagepointsrelativetocostinDKKbased pany, andcommercialpoliticalrisksinvolved. counts; pastandexpectedfutureresultsoftheprojectcom- value inDKKofIFU’s investmentaccordingtothelatestac- ments, ifapplicable,relevantandexercisable;thebook is listedandthemarketdeemedliquid;formalexitagree- known stockexchangeprice,ifrelevant,i.e.thecompany sheet date,takingintoaccountsuchaspectsasthelatest fined astheestimateddisposalvalueinDKKatbalance relative tocostinDKK. ured atfairvalue,i.e.netoforincludingvalueadjustments Share capitalinvestmentsinprojectcompaniesaremeas- Share capitalinvestmentinprojects,net Balance sheet Fixed assetsandleaseholdimprovementscostingless Straight-line depreciationismadeonthebasisofanes- Value adjustmentsotherthanexchangerate Value adjustmentsonsharecapitalaremeasuredin Fair valueforaspecificsharecapitalinvestmentisde- cost, whichinmostcasescorrespondstonominalvalue. value. Othercurrentliabilitiesaremeasuredatamortised Current liabilitiesrelatedtoprojectsaremeasuredatfair Current liabilities most casescorrespondstonominalvalue. Long-term debtismeasuredatamortisedcost,whichin Long-term debt nominal value. ured atamortisedcost,whichinmostcasescorrespondsto under longtermdebtorcurrentliabilitiesandaremeas- leases arecapitalisedandrecognisedinthebalancesheet Lease commitmentsrelatingtoassetsheldunderfinance Lease commitments guarantees”. ceivables under“Contributionfromprojectloansand come statementasvalueadjustments,portfolioandre- related toguaranteeagreementsarerecognisedinthein- guarantee agreements.Adjustmentsofprovisionforlosses Provision forlossescomprisesanticipatedrelatedto Provision forlosses cash positionatthebeginningandendofyear. erating, investingandfinancingactivitiesaswellIFU’s with thedirectmethodandshowsIFU’s cashflowfromop- The cashflowstatementhasbeenpreparedinaccordance Cash flowstatement cial income,net. bonds arerecognisedintheincomestatementunderfinan- at parvalue.Realisedandunrealisedgainsorlosseson Cash comprisescashathandlessshort-termbankdebt. MTN Publicom,Uganda

IFU Annual Report 21 IFU Annual Report 22 NOTE ASSETS BALANCE SHEET31DECEMBER NOTE INCOME STATEMENT 0 neetrcial eae opoet 86322,571 18,683 Bonds Otherreceivables 12/ Interestreceivablerelatedtoprojects 11/ 10/ /Poetlas e 9,7 445,594 497,179 1,642 852 510,791 531,728 Fixedassetsandleaseholdimprovements Projectloans,net 9/ (35,813) 8/ Sharecapitalinvestmentinprojects,net (37,579) 7/ (80,177) (31,762) (2,191) Financialexpenses Financialincome 6/ (138) 6/ 37,819 (6,458) Operatingexpenses, net 5/ 38,732 (43,990) Othervalueadjustments,incomeandexpensesrelatedtoprojects,net 4/ Value adjustments,portfolioandreceivables 3/ Interestincomeandfeesrelatedtoprojectloansguarantees 2/ Value adjustments,portfolioanddividendreceivables 1/ OA SES145652,192,972 1,435,665 1,234,945 405,906 958,027 1,029,759 TOTAL ASSETS (333,158) 778,752 Total currentassets (312,852) Cash 810,031 2004 96,864 CURRENT ASSETS Total fixedassets 30,504 58,950 Value adjustments Project loansatcost 9,878 FIXED ASSETS 94,763 6,363 47,457 (22,737) The netincomefortheyearhasbeentransferredtoequitycapital. 7,765 (40,956) NET INCOMEFORTHEYEAR 17,007 32,774 20,326 137,910 OPERATING INCOME(LOSS) (26,551) 59,574 30,588 122,861 (40,868) GROSS CONTRIBUTIONFROMPROJECTS 42,931 49,418 (21,686) Total contributionfromprojectloansandguarantees (43,786) 56,727 Reversed provisionforlosses(loanswrittenoff) Project loanswrittenoff Contribution fromprojectloansandguarantees Total contributionfromsharecapitalinvestments Reversed provisionforlosses(divestedsharecapitalinvestments) Share capitalwrittenoff(relativetocost) Reversed plusvalues(divestedsharecapitalinvestments) Income fromsaleofshares(relativetocost) Dividends fromprojects Contribution fromsharecapitalinvestments au dutet 6697 (585,938) (616,987) 1,096,729 1,148,715 Value adjustments Share capitalinvestmentinprojectsatcost 2003 DKK 1,000 DKK 1,000 6,1 427,333 651,997 162,511 134,072 36041,859 23,620 060133,044 90,640 294 (3,945) (2,994) 042003 2004 042003 2004 DKK 1,000 DKK 1,000 NOTE LIABILITIES ANDEQUITYCAPITAL BALANCE SHEET31DECEMBER 5 URN IBLTE 04657,215 20,406 RELATED PARTY DISCLOSURES PLEDGED ASSETS 20/ CONTINGENT LIABILITIES 19/ AVAILABLE EQUITYCAPITAL18/ ANDCLEARANCESINPRINCIPLE FUNDSCOMMITTED TOPROJECTS 17/ 16/ CURRENTLIABILITIES 15/ LONG-TERMDEBT 14/ 13/ oa rvsosadln-emdb 08411,876 10,874 2,192,972 1,435,665 TOTAL EQUITYCAPITAL, PROVISIONFORLOSSESANDLIABILITIES Total liabilities Total provisionsandlong-termdebt oa qiycptl144352,123,881 1,404,385 1,072,945 1,103,449 Guarantees PROVISION FORLOSSES Total equitycapital Accumulated reserves Paid-in capital EQUITY CAPITAL DKK 1,000 0,3 1,050,936 300,936 04657,215 20,406 ,4 11,210 9,948 042003 2004 2 666 926 Chulumenda, Zambia DKK 1,000

IFU Annual Report 23 IFU Annual Report 24 CASH FLOWSTATEMENT AHEDO ER1251427,333 162,511 184,324 243,009 427,333 (264,822) 0 0 28,951 (750,000) (778,184) 28,951 (1,221) (26,963) 113,689 216,110 (296,678) 119,462 422,200 (123,354) 198,149 518,592 (175,777) CASH ENDOFYEAR 91,936 (202,196) 189,645 CASH BEGINNINGOFYEAR NET CHANGEINCASH 100,369 (33,042) Net cashfrom(to)financingactivities 3,908 91,162 (42,647) Repaid capitalduringtheyear 20,428 Other proceedsfromfinancingactivities 20,660 Repaid toEIB(ECFIIIIFacility) 10,770 39,700 CASH FLOWFROM(TO)FINANCINGACTIVITIES 88,415 59,538 Net cashfrom(to)investingactivities 23,801 Received from(investedin)bonds Disbursement ofprojectloans Paid-in sharecapitalinprojects Received fromprojectloans Received fromsaleofshares CASH FLOWFROM(TO)INVESTINGACTIVITIES Net cashfromoperatingactivities Net paymentsrelatedtofinancialincomeandexpenses Operating expenses,net Other projectrelatedpayments Interest fromprojectsreceived Dividends fromprojectsreceived CASH FLOWFROMOPERATING ACTIVITIES DKK 1,000 042003 2004 DKK 1,000 NOTES Othervalueadjustments,incomeandexpensesr 4 Inter 2 1V 3V te au dutet rcials 27 (360 (3,919) 2,009 (217) 1,604 (3,871) 14,383 (11,050) (262) 18,301 (2,998) (40,272) Other valueadjustments,incomeandexpensesrelatedtoprojects,net 5,444 (4,882) Various expenses Grants toprojects (47,121) Other fees (14,418) Interest fromreceivables 33,987 Other valueadjustments(receivables) (7,586) Exchange rateadjustments(derivatives) (21,478) Exchange rateadjustments(receivables) 36,400 Value adjustments,portfolioandreceivables(projectloansguarantees) 13,974 Value adjustmentsinterestreceivables Value adjustmentsguarantees (20,434) Changes inprovisionforlosses(projectloans) (4,368) Exchange rateadjustments(derivatives) Exchange rateadjustments,unrealised(projectloans) (39,622) Exchange rateadjustments,realised(projectloans) Interest incomeandfeesrelatedtoprojectloansguarantees Guarantee commission Front-end fees Interest fromprojectloans Value adjustments,portfolioanddividendreceivables(Sharecapitalinvestments) Value adjustmentsreceivables Changes inprovisionforlossesportfolio Changes inplusvaluesportfolio alue adjustments,por alue adjustments,por est incomeandfeesr tfolio andr tfolio anddividendr elated topr eceivables (pr oject loansandguarantees eceivables (Shar oject loansandguarantees) elated topr e capitalinvestments) ojects, net DKK 1,000 3,6)(80,177) (31,762) (6,458) (43,990) 87237,819 38,732 ,7 189 2,372 3,614 2,332 042003 2004 18 (2,191) (138) 4)0 (44) 8(294) 18 184 0 218 0 02 DKK 1,000

IFU Annual Report 25 IFU Annual Report 26 Financialincomeandexpenses 6 Operatingexpenses,net 5 vrg ubro mlye,Ha fie5 61 19 56 19 2,631 127 1,288 36,713 2,408 1,312 128 34,037 Average numberofemployees,Regionaloffices 807 Average numberofemployees,Headoffice (1,370) 69,555 Total remunerationtothe SupervisoryBoardandExecutive (32,372) Total 1,238 remunerationtothe ExecutiveBoard (775) (821) Total remunerationtothe SupervisoryBoard 66,728 (28,374) Personnel expensesintotal (431) Other expensesforsocialsecurity Pension contributions Salaries, remunerationsetc, Specification ofpersonnelexpenses(salariesetc,) 8,765 - Hereofnon-auditfees - Hereofauditfees 9,445 "Fees forexternalassistance"and"Various expenses": Fee totheauditoroffundsincludedin 503 IFU's partofoperatingexpenses,net Operating expenses,netchargedtoIFV Operating expenses,netchargedtoIØ 549 Total operatingexpenses,net Total income Various income Board memberfees,netoftax Management fees Income Total expenses Various expenses Depreciation offixedassetsandleaseholdimprovements(note9) Office expenses IT expenses Fees forexternalassistance Fees forSupervisoryBoard Regional officeexpenses Travelling expenses Rental expenses Salaries, Headoffice Expenses neeticm,cs n od 41635,346 (3,945) 24,176 (2,994) Financial incomeand expenses Financial expenses Interest expenses,bankchargesand exchangerateadjustments Financial expenses Financial income Gain onbonds,net Interest income,cashandbonds Financial income DKK 1,000 70740,086 37,047 35,813 37,579 71,186 67,581 32,046 29,784 06637,914 20,626 41,859 23,620 294 (3,945) (2,994) ,2 3,919 3,720 3,246 2,882 3,658 1,715 3,949 3,631 1,288 1,783 11,679 3,893 4,288 3,295 1,312 9,758 3,794 3,632 042003 2004 83 (1,631) (253) (557) (853) (141) (281) 56 6,513 (556) 4 278 529 647 591 580 75 DKK 1,000 8Pr Shar 7 ) Project loansendofyearatcostarecomprisedof: *) risk, andsyndicatedcapitalthereforeonlybecomesduetotheextentthatIFUreceivespaymentfromtheseprojects. Syndicated capitalisinvestmentreceivedfromthirdpartiesandinvestedinprojects,principleontheirownaccoun DKK 18.7m(DKKin2003),measuredatfairvalue. Share capitalinvestmentsacquiredbyIFUmeansofsyndicatedarenotincludedintheabovefiguresandamountto Equity loans Subordinated loans Senior projectloans xhnert dutet eaiet ot(397 (86,411) (246,747) (93,997) (79,628) (218,855) (6,363) 20,306 (22,737) (253,530) (119,462) 296,678 (333,158) (91,936) 175,777 0 622,318 (14,419) Value adjustmentsexcl,exchangerate adjustment 778,752 Exchange rateadjustmentsrelativetocost Accumulated valueadjustmentsendofyeararecomprisedof: (8,348) (21,477) Project loans,netendofyear Accumulated valueadjustmentsendofyear Value adjustmentsduringtheyear Accumulated valueadjustmentsbeginningofyear Project loansendofyearatcost* Write-offs duringtheyear Project loanstransferredtootherreceivablesduringtheyear (670,364) Exchange rateadjustmentsduringtheyearrelativetocost Repayments duringtheyear (653,259) Disbursements duringtheyear Project loansbeginningofyearatcost 21,272 (31,049) (26,551) (607,210) (159,528) (40,868) (585,938) (109,342) 123,354 Value adjustmentsexcl,plusvalues Plus values 202,196 Accumulated valueadjustmentsendofyeararecomprisedof: Share capitalinvestmentinprojects,netendofyear 1,159,454 1,096,729 Accumulated valueadjustmentsendofyear Value adjustmentsduringtheyear Accumulated valueadjustmentsbeginningofyear Share capitalinvestmentinprojectsendofyearatcost Write-offs duringtheyearatcost Cost ofsharessoldduringtheyear Paid-in sharecapitalinprojectsduringtheyear Share capitalinvestmentinprojectsbeginningofyearatcost oject loans,net e capitalinvestmentinpr ojects, net DKK 1,000 ,4,1 1,096,729 1,148,715 3282 (333,158) (312,852) (333,158) (312,852) (585,938) (616,987) (585,938) (616,987) 4,3 316,185 443,791 245,032 548,428 9,7 445,594 497,179 778,752 810,031 510,791 531,728 1,3 778,752 810,031 65118,776 16,571 62284,426 36,272 042003 2004 DKK 1,000 t and

IFU Annual Report 27 IFU Annual Report 28 0Inter 10 1Otherr 11 Fixedassetsandleaseholdimpr 9 ) Statedamountfor2004concerns ahedgedamountofUSD11.8mwithtermfrom2005to2010. *) ) ProjectloansendofyearatcostinDKKdistributedaccordingtocurrencydenomination: *) diitaiercials1,0 7,186 263 10,309 4,967 Rental deposits Accrued interestreceivablesfrombonds Administrative receivables Derivatives* ercainfrdsoa fteya 28 0 503 455 549 (238) 958 Recognised leasedassets The carryingamountendofyearincludes: Book valueendofyear Depreciation endofyear Depreciation fordisposaloftheyear Depreciation fortheyear(note5) Depreciation beginningofyear Cost endofyear Disposals duringtheyear Additions duringtheyear Cost beginningofyear 1 te rjc-eae eevbe 9(501) 89 101,389 52,593 42,890 Value adjustments Other project-relatedreceivables Receivable front-endfees 39,201 Receivables fromsaleofloan Receivables fromsaleofshares Dividend receivables Interest receivablerelatedtoprojects Value adjustments Interest receivablerelatedtoprojectsbeforevalueadjustments figures andamounttoDKK1.9m(DKK2.9min2003),measuredatfairvalue. Project loansprovidedbyIFUmeansofsyndicatedcapitalarenotincludedintheabove USD DKK U 3514,0 2,8 305,560 324,088 41,106 43,521 Other currencies EUR ) USD11.8mishedgedagainstDKK(USD13.5min2003) 1 est r eceivables eceivable r elated topr ojects ovements urnyCurrency Currency 0575,6 6,6 400,358 368,364 52,965 50,587 2004 2003 DKK 1,000 0,6 60,634 109,968 1,3 778,752 810,031 2,1)(20,319) (20,518) 286102,117 52,896 060133,044 90,640 22,860 21,885 428104,882 54,218 22,571 18,683 132 (2,765) (1,322) ,6 958 1,269 2,600 2,121 2,008 2,600 ,1 12,200 7,611 042003 2004 49 0 (479) 8 618 583 3 495 1,642 337 852 8 1,573 780 984 552 592 0 1,641 0 DKK 1,000 4Long-ter 14 2Bonds 12 7A 17 Fundscommittedtopr 16 Cur 15 T 13 ) GrossoutstandingguaranteesamounttoDKK2,255(DKK9,925in2003) *) hereofpayableafterfiveyears:DKK4,515 *) Deferred income 0 Current accounts Administrative debt 976,081 Other projectrelateddebt 1,050,936 EIB (ECFIIIIfacility) (750,000) 1,072,945 1,050,936 EIB (ECFIIIIfacility)* Total equitycapitalendofyear Accumulated reservesendofyear Net incomefortheyear Accumulated reservesbeginningofyear Paid-in capitalendofyear Repaid capitalduringtheyear Paid-in capitalbeginningofyear Bonds endofyear Listed bonds mut aal npoetareet 1,5 382,565 Clearances inprinciple fornewprojectsamountto 310,359 Available equitycapital Project participation Reserves againstlosses Total equitycapital The availableequitycapitalisreachedasfollows: Funds committedtoprojects Binding commitments Guarantees, net* Amounts payableonprojectagreements for investments.Thestatedamountofguaranteesisnetprovisionlosses,ifany. Funds committedtoprojectsarecomprisedofundisbursedcontractualcommitmentsallocated otal equitycapital vailable equitycapitalandclearancesinprinciple r ent liabilities m debt ojects 15382 (1,495,805) (1,543,802) DKK 1,000 ,0,8 2,123,881 1,072,945 1,404,385 1,103,449 ,0,8 2,123,881 1,404,385 1841 628,742 (138,491) 0,3 1,050,936 300,936 651,997 651,997 134,072 134,072 4,9 451,479 347,296 516,849 124,637 496,212 184,108 04657,215 20,406 15,186 12,611 96,864 30,504 ,2 2,853 39,168 37,946 2,622 1,222 4,987 3,734 1,253 11,210 11,210 9,948 9,948 ,4 9,647 1,745 042003 2004 8 8 186 2 666 926 DKK 1,000

IFU Annual Report 29 IFU Annual Report 30 8Contingentliabilities 18 0Relatedpar 20 Pledgedassets 19 the SupervisoryandExecutiveBoardmembers. During theyeartherewerenotransactionsotherthansalariesandfeespaidto IFU's otherrelatedpartiesarethemembersofSupervisoryandExecutiveBoards. Supervisory andExecutiveBoards board members. dividends, interestincomeandfeesdirectors'fromthecompaniesinwhichIFUemployeesare It shouldbenotedthattransactionsconductedduringtheyearwithprojectcompaniesinclude exercised overthem. The projectcompaniesarenotconsideredrelatedparties,asnocontrollingorsignificantinfluenceis IFU's percentageinterestsinprojectinvestmentsoftenexceed20%,butalwaysremainbelow50%. IFU projectinvestments-sharesandloans as securityforseniorloansgrantedtotheproject. In oneproject,IFU–asallothershareholdershaspledgeditsshares(atanestimatedfairvalueofDKK12.5m) assecurityforlong-termdebttoEIB. IFU hasat31December2004pledgedbondsandcashamountingtoDKK13.9m – hereofduewithinthefollowingyearDKK3.2m(DKK2.8min2003). The totalleaseandrentalcommitmentsamounttoDKK4.8m(DKK3.4min2003) ty disclosur es Fan Milk,Nigeria

IFU Annual Report 31 IFU Annual Report 32 son inquestionhasaspecialinterest. discussion ofacaseinvolvingcompanyinwhichtheper- Supervisory Boardoranemployeecannotparticipateinthe 1985, sections3–6).Theprincipleisthatamemberofthe Public AdministrationAct(ActNo.571of19December makes decisionsaboutinvestmentsandkeyissues. basis. OntherecommendationofExecutiveBoard,it another three-yearperiodbeginningAugust2003. pointment ispersonal. the SupervisoryBoardforathree-yearperiod.Eachap- Chairman, theDeputyChairmanandothermembersof The DanishMinisterofForeignAffairsappointsthe Supervisory Board Management Members oftheSupervisoryBoardmaynotbuyorsell The rulesofdisqualificationfollowtheprovisions The SupervisoryBoardusuallyconvenesonamonthly The currentSupervisoryBoardhasbeenreappointedfor Advisory Board,DanskeBankA/S. Contura A/S,International A/S,IdosanVækstFonden,NSGenePersonaA/S.Member ofthe MSc (Pharm).ManagingDirector, T-cellic A/S.Otherboardmemberships:IØ,IFV, FertinPharmaA/S,Ferrosan Elsebeth Budolfsen(1947),membersince2000. Brancheforeningen forBiogas. IØ, IFV, PedregalS.deRL.,BWSCA/S,GuamInc.,MindanauPanamaS.A., MSc (Engineering).ManagingDirector, Burmeister&Wain ScandinavianContractorA/S.Otherboardmemberships: Sigurd Ø.Andersen(1951),membersince2000. IØ, IFV, DSB,NaesborgA/S. MSc (Economics).ManagingDirector, TheEconomicCounciloftheLabour Movement.Otherboardmemberships: Lars Andersen(1958),membersince1994. (Copenhagen BusinessSchool). Danske Invest,BGCentreforBusinessHistoryandLaw, EconomicsandFinancialInstitutions ZaccoDenmarkA/S.Otherboardmemberships:IØ*,IFV*,HöganäsAB, PhD (Economics).ManagingDirector, Agnete Raaschou-Nielsen,DeputyChairman(1957),membersince2000. Systems A/S,Lyskilde HoldingA/S,FrandsenLightingJP/PolitikensHusEksportKreditFonden. Dantherm HoldingA/S,EksportKreditFinansieringFLSIndustriesF.L.Smidth A/S*,GreentechEnergy AXCEL IndustriInvestorA/S,IIManagementExtendReachCorporationA/S*,Bukkehave MSc (EconomicsandBusinessAdministration).Director, BUURINVESTA/S.Otherboardmemberships:IØ**,IFV**, Johannes Poulsen,Chairman(1942),membersince1997. be investigatedfurther. have goodcorporategovernance,butin2005theissuewill corporate governance.ItisgenerallyagreedthattheFunds During 2004IFU’s SupervisoryBoarddiscussedtheFunds’ Corporate governance confidentiality. visory Board,orallyorinwriting,isbeingtreatedwithfull edge fromboardworkappliesingeneral. information; however, theprohibitionofutilisingknowl- nies ofwhichtheSupervisoryBoardbelievesithasinside rises anupdatedlistateachmeetingofthelistedcompa- To preventinsidertrading,theSupervisoryBoardautho- they haveobtainedspecialknowledgethroughboardwork. shares orothersecuritiesissuedbycompaniesofwhich All informationreceivedbythemembersofSuper- other securitiesissuedbycompaniesofwhichtheyhave Supervisory Boardregardingsellingorbuyingshares Managing Director. Theruleswhichapplytothe The DanishMinisterofForeignAffairsappointsthe Executive Board MSc (Economics) Frank NormanLarsen(1949),DeputyManagersince1994. Board memberships:DONGA/S**,ISSA/S*,KapacitetAirLiquide A/SandVennelyst A/S MSc (Engineering),(Economics)andPhD(Physics). Sven Riskær(1938),ManagingDirectorsince1978. LLM. Ambassador, MinistryofForeignAffairs.Otherboardmemberships:IØ,IFV. Karen Wermuth (1954),membersince2000. International StudiesandHumanRights,DanishInstituteforStudies. MA. StateSecretary, Ambassador, MinistryofForeignAffairs.Otherboardmemberships:IØ,IFV, DanishCenterfor Carsten Staur(1954),membersince2000. Danish Trade Council,LRRealkreditA/S. Other boardmemberships:IØ,IFV, NordeaKredit A/S*,NordeaRealkreditaktieselskab,BankPoland, MSc (Economics)andAMP(Insead).MemberoftheExecutiveManagement,NordeaBankDenmarkA/S. Michael Rasmussen(1964),membersince2000. Superfos IndustriesA/S,B.U.H.L.-RandersA/S**,AarhusUnitedHEMPELJP/PolitikensHusA/S. MSc (Engineering).Director. Otherboardmemberships:IØ,IFV, SvejsefabrikkenMigatronicA/S**,SuperfosA/S, Kjeld Ranum(1938),membersince1994. Other boardmemberships:IØ,IFV, NordicInvestment Bank,IPSIS(London). Degrees inEconomics(UniversitiesofÅrhus,Wisconsin, Brügge).ManagingDirector, EksportKreditFonden. Lars Kolte(1950),membersince1997. as membersoftheExecutiveBoard. Director andtheDeputyManagingintheircapacity obtained specialknowledgealsoapplytotheManaging DeputyChairman * *Chairman **

IFU Annual Report 33 IFU Annual Report 34 ” ” IFU evaluation include elementswhichpromote developmentoftheprivatesector. (…)Thereisdefinitely aneedforIFU. functioning privatesector. Itistherefore crucialthatthepoliticalobjectivesfordevelopment assistance It cannolongercomeasa surprisetoanyonethatthefoundationforsustainable developmentisawell- and enhancedtheirinternationalisation. ects havecreatedpositiveresultsfortheDanishcompanies uation alsounderlinesthefactthatIFU’s investmentproj- mental effectsinthehostcountriesquestion.Theeval- countries, andmostoftheprojectsshowpositivedevelop- have promotedeconomicdevelopmentinthedeveloping institution. Fund, withminorchanges,continuesasaself-governing by IFUthroughtheyears,anditrecommendsthat and theDanishMinistryofForeignAffairs. Consulting GroupattherequestofIFU’s SupervisoryBoard lished inAugust2004,whichhadbeenpreparedbyNordic sults. ThatwasconcludedinanevaluationofIFU,pub- world, IFUcanlookbackonalargenumberofpositivere- 90,000 jobscreatedindevelopingcountriesaroundthe With morethan500projects toitscreditandmorethan Danish tradeandindustry. tivity indevelopingcountriesbypromotinginvestmentsthesecollaborationwith For morethan35yearsIFUhasfulfilleditslegallydefinedobjectivetopromoteeconomicac- been published. tance intheperiod2005-2009,whichhasjust Government’s strategyfordevelopmentassis- IFU’s activitiesfitextremelywellwiththe But IFUdoesnotonlygainpraise.Amongotherthings According totheevaluationreport,IFU’s investments The reportemphasisestheuniqueexpertisedeveloped Bertel Haarder, MinisterforDevelopmentCooperation ” (until 18February2005) Hans SkovChristensen,Director General, ConfederationofDanishIndustries the evalutionofIFU. Confederation ofDanishIndustries,HansSkovChristensenattheconferenceon Minister forDevelopmentCooperation,BertelHaarderandDirectorGeneral,the Group andtheChairmanofIFU’s SupervisoryBoard,direc- International, PerK.Hansen,Dir Carlsberg, J.Kollerup,ManagingDirectorofFanMilk Nils S.Andersen,President,ChiefExecutiveOfficerof Director General,theConfederationofDanishIndustries, Minister forDevelopmentCooperation,HansSkovChristensen, evaluation. PresentationsweremadebyBertelHaarder, On 10September2004IFUhostedaconferenceonthe Conference abouttheevaluation found onwww.ifu.dk. business sectordevelopment.Theevaluationreportcanbe its contributiontoimprovingtheenablingenvironmentfor mends thatIFUshouldfindwaystofurtherstrengthening vested capital…”.Atthesametimereportrecom- sized companiesintermsofnumberprojectsandin- “increased attentionshouldbegiventosmallandmedium- enough inthepoorestcountries,anditisalsostatedthat the evaluationreportcriticisesIFUfornotinvesting ector, NordicConsulting ” ” ” must havebeenveryunlucky –weareverysatisfiedwithIFU’s effortsinourcompanies. I havenoticedthatcriticism hasbeenvoicedonIFU’s effortsinAfrica.AllIcansayisthatsomecompanies dations. the Fundhasalreadyacteduponmanyofrecommen- Fund’s workcarrysuchgreatweight.Inadditiontothis, pleased withthefactthatpositiveeffectsof IFU isessentiallysatisfiedwiththeevaluationand Consequences oftheevaluation demand driven. did, however, underlinethatultimatelyIFU’s activitiesare vestment activitiesinthepoorestcountries.TheMinister same timetheMinisterexpressedhiswishforincreasedin- sized enterprisesbenefitingfromIFU’s expertise.Atthe IFU, buthewouldalsoliketoseemoresmallandmedium- found itgratifyingthatsomanylargecompaniesworkwith necessary forasatisfactorydevelopment.Hetherefore clear thatanactivecontributionbyDanishcompaniesis Minister forDevelopmentCooperation,whoalsomadeit 2009, whichhasjustbeenpublished”,underlinedthe strategy fordevelopmentassistanceintheperiod2005- nies whentheytaketheleapintodistant,riskymarkets. est countries,andsecondlyasapartnertoDanishcompa- promoter ofprivatesectordevelopmentintheworld’s poor- contribution todevelopmentandglobalisation:Firstly, as tor JohannesPoulsen.AllspeakersemphasisedIFU’s dual benefit fromthelocalknowledgeheldbyIFUandIØ. It isofgreatimportancetousthatwecancreategoodofficialcontactsthroughtheFunds,and More thanhalfofallIFUprojectsinthelasttenyears “IFU’s activitiesfitextremelywellwiththeGovernment’s ” IFU’s SupervisoryBoard,norwithDanida. ness sectordevelopmenthavenotresounded,neitherwith involved inimprovingtheenablingenvironmentforbusi- investors shouldbeabandoned,andthatIFUget world liveinChinaandIndia,whereIFUisveryactive. that approximatelyhalfoftheverypoorestpeoplein poorest countriesandregions.Finally, itshouldbenoted makes aconstantefforttoextenditsadvisernetworkinthe poorest countriesandregions.InthisconnectiontheFund for largerpovertyorientation,IFUfocusesevenmoreonthe net portal.Inaccordancewiththereport’s recommendation Fund, theDanishTrade CouncilandIFU. lished intheautumnbetweenDanida,ExportCredit Thus, acloserandmoredynamiccooperationwasestab- tween IFUandDanida’s businesssectorinstruments. ation betweenthoseenterprisesandIFU. develop a“globalisationpackage”tofacilitatethecooper- terprises. AsaresulttheFundhastakeninitiativeto with anincreasingnumberofsmallandmedium-sizeden- uation recommendsthatIFUattemptstoworkevenmore tendency isthatthisratioincreasing.However, theeval- Danish partnerswithlessthan300employees,andthe have beenestablishedwithsmallandmedium-sized Nils SmedegaardAndersen,President,ChiefExecutiveOfficer, Carlsberg The suggestionsinthereportthattietoDanishco- The cooperationincludesthecreationofasharedInter- The evaluationalsorecommendsclosercooperationbe- J. Kollerup,ManagingDirector, FanMilkInternational ”

IFU Annual Report 35 36 Danish investments in developing Annual Report

IFU countries – seeking efficiency

Introduction Cost-motivated investments – so-called efficiency-seeking investments – increasingly replace or complement traditional market-seeking investments. This process is to a large extent driven by increasingly internationalisation-confident SMEs in the services and metal and machinery industries investing in emerging markets of Eastern Europe and Asia. These were among the main conclusions of a 2004 study of IFU’s and IØ’s portfolios, conducted as input to a major project on ‘outsourcing’ organised by the Confederation of Danish Industries (DI).

Changing investment motives Most important investment motives (n=381)

Danish equity involvement in transition economies and de- 80%

veloping countries rose from approximately 10% of total 70% Danish outward FDI stock in 1998 to approximately 20% 60% in 2002. The study of IFU’s and IØ’s portfolios provided a 50% unique opportunity to understand the motives behind this 40% 30% development. 20%

Traditionally, Danish investments in developing countries 10%

have been motivated with market access. In line with this, 0% Market- Efficiency- Resource- Access to Technology sale almost 70% of IFU’s and IØ’s projects were market-seek- seeking seeking seeking regional markets ing. However, the study reveals that significant changes in

investment motives have taken place since the early Efficiency-seeking investment and year of establishment (n=381) 1990s; where efficiency-seeking investments accounted 2002-2003 for approximately 30% of the projects in all years, it was ap- 2000-2001

proximately 40% for projects established after 2000. 1998-1999

1996-1997

Who are the efficiency-seeking investors? 1994-1995 Where efficiency-seeking investments were previously 1992-1993 driven mainly by firms in the textile and furniture indus- 1990-1991 tries, they are now increasingly driven by firms engaged in 1988-1989 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% metal and machinery production, agricultural production, and software and engineering services. Moreover, effi- ciency-seeking investments are increasingly driven by Share of efficiency-seeking investors and size of parent company (n=378)

SMEs pressured by their industrial customers to locate 45% parts of their activities in low cost locations. 40% Where efficiency-seeking investments were previously 35% driven by simple cost advantages, such investments are in- 30% 25% creasingly demanding presence of complementary assets 20%

such as skilled (sometimes highly specialised) labour, ef- 15%

fective infrastructure, and clusters of related and support- 10% ing industries. Such conditions are offered by a limited but 5% growing number of countries, mainly in Eastern Europe 0% Under 50 50-150 150-1000 More than 1000 and parts of Asia, in particular India, China and Vietnam. Employees 37 Annual Report IFU

Welfare effects of efficiency-seeking investments Share of efficiency-seeking investments in different regions (n=381)

From a development perspective, efficiency-seeking in- 50% vestments may be positive. They may assist developing 45% countries in exploiting their comparative advantages by 40% generating exports. Moreover, they may create productiv- 35% ity spillovers on host countries and help local industry up- 30% 25% grade into higher value added activities. The main welfare 20% concerns are related to loss of Danish jobs. The experi- 15% ence shows, however, that the net effect is rather limited. 10%

Efficiency-seeking investments may cause job loss; not 5% ‘just’ low skill jobs, but increasingly also skilled jobs 0% Africa Latin South Asia South East China CEE EU Other CEE within services and metal and machinery industries. America Asia However, the study suggests that there are also significant benefits associated with efficiency-seeking investments; seeking investments may free resources in Denmark and benefits such as export generation and creation of jobs to allow the investors to concentrate on developing their core service the subsidiary. Thus, it is estimated that 446 ac- competencies. In fact, the very ability to organise the tive IFU and IØ projects have generated 15,000 man- value chain at a global scale is becoming a core compe- years in Denmark. In a dynamic perspective, efficiency- tency for a growing number of Danish firms.

Cooperation with SMEs

A 2004 study of the development in IFU’s and IØ’s portfo- some of the disadvantages of ‘smallness’. In this connec- lios revealed that SMEs, in the study defined as companies tion, IFU plays a pivotal role, partly by facilitating access with less than 150 employees, play a growing role, both in to a huge network of public and private partners, partly by terms of number of projects and in terms of investments. providing access to generic as well as country specific in- This notable change is partly a result of IFU’s active target- formation and advice on foreign establishment. ing of SMEs, e.g. its close collaboration with the PS SME investments are particularly widespread in Eastern Programme. Recently, IFU has adopted a comprehensive Europe where the psychological and physical distances are SME package to further promote SME investments. manageable. Another group of SME investments are in rel- However, the study also suggests that the growing SME orientation reflects a notable change in the internationali- sation of Danish industry. The growing role of SMEs is fa- Share of SMEs in different years (n=856) (SMEs are companies with less than 150 employees at parent) cilitated by firm-external as well as firm-internal factors: A 100% reduction in the transaction and coordination costs of or- 90% SME share of projects ganising value added activities across borders combined 80% SME share of total investments with intensified competitive pressure from low cost loca- 70% tions make internationalisation of SMEs both possible and 60% necessary. But equally important are firm-internal factors, 50% such as improved internationalisation and strategic capa- 40% bilities of SMEs. Some SMEs are even ‘born globals’, skip- 30% ping the incremental approach to internationalisation tra- 20% ditionally characterising SME internationalisation. 10% 0% Furthermore, growing abilities to establish network col- laboration with other firms help SMEs compensate for 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 38

atively underdeveloped economies and are typically PS Share of SME parent companies in different regions (n=856) Programme spin-offs. Finally, a group of SMEs are ‘client 100%

Annual Report followers’, i.e. companies following their major accounts 90% 80% IFU into dynamic emerging markets. 70% The growing role of SMEs creates a number of opportu- 60%

nities as well as challenges for IFU. IFU investment and ad- 50%

vice probably create maximum additionality in the case of 40% SMEs, as they are typically relatively dependent on IFU’s 30% services. However, from a Fund sustainability perspective, 20% SME projects generate less revenue, have higher failure 10% 0% rate, and have higher administrative overhead per invested Africa Latin South Asia South East China CEE EU Other CEE DKK than large projects. Moreover, from a development America Asia Members

perspective, SME projects generate fewer direct and I Small: Less than 50 employees spillover effects on host countries per invested DKK than I Medium: Between 50 and 150 employees do larger projects.

Globalisation package for SMEs

An increasing number of small and medium-sized enter- they are prepared to invest globally. Once the project ideas prises (SMEs) are showing an interest in investing abroad. become more specific, the Fund can arrange “project plan- More than 60% of all IFU projects established in 2004 ning meetings”, where ideas are reviewed and subse- were in cooperation with enterprises with less than 300 quently specified in a written “project diagnosis” prepared employees and 40% of the projects in cooperation with en- by the adviser. The project diagnosis includes an assess- terprises with less than 50 employees. It is the Fund’s ex- ment of the project idea and a plan for the next steps to be perience that many SMEs have a special need for assis- taken. Throughout the process the Fund can among other tance and expertise before, during and after taking the leap things offer assistance with the development of the com- into the world. In the evaluation of IFU, which was carried pany’s globalisation strategy, take the initiative to deter- out in 2004, it was also recommended that IFU should fo- mine a satisfactory environmental policy, and prepare draft cus more on cooperation with SMEs in the future. agreements between the parties. Furthermore, prior to fi- Against this background the Fund took the initiative in nalizing project implementation, the Fund will organise a 2004 to prepare a so-called “globalisation package”, “pre-investment meeting” where all potential problems are which will ensure assistance to SMEs during all phases of put on the table, and as the project starts up the Fund will a project – from the first tentative thoughts and ideas to the appoint a member to the board of the project company, final establishment and operation of a project company. who will assist with the implementation and operation of Specially trained SME advisers can offer companies so- the project together with the Fund’s local offices and ad- called “globalisation checks”, which will uncover whether visers.

Key figures IFU 1968-2004

10,000

8,000

6,000 DKKm 4,000

2,000

0 I Remaining I Value Contracted Export from Disbursed Paid in from paid-in adjustments investments Denmark amounts projects capital at 31.12.2004

I Repaid I Fund’s capital equity at 31.12.2004 achieved onprojectswheretheDanishpartneremploys ber ofprojects. The latterfigure,however, isbasedonaratherlimitednum- projects inEurope(Turkey andMalta)theIRRis0.65%. against 11.05%inAsiaand4.25%LatinAmerica.For 4.32%. TheIRRonprojectsinAfricaamountsto-9.58% Total IRRonthe315projectsfromwhichIFUhasexitedis Internal rateofreturn(IRR)onexitedprojects sis ofthemortalityrateforallIFUprojectsispresented. ter IFU’s exit.Inthefollowingselectedstatisticsandaccountsshallbepresentedforexitedprojects.Further, ananaly and profitabilityofIFUprojectscanonlybeevaluatedinalong-termperspective–fromIFU’s perspective–bestaf- The totalnumberofIFUprojectsreached528attheend2004.Outthoseexitedfrom315projects.Success Statistics andaccumulatedaccounts -15,0 -10,0 Percentage -15,0 -10,0 Percentage 10,0 15,0 10,0 15,0 -5,0 -5,0 0,0 5,0 0,0 5,0 When relatedtosizeofpartner, thehighestIRRis (Disbursed DKK Less thanDKK10m L I I I L I I I DKK 131.1m) 405.6m) Africa Total Loans Shares Total Loans Shares (Disbursed No. ofprojects No. ofprojects 90 L 139 L (Disbursed DKK 693.1m) Asia 137 L DKK10m -50m DKK 511.9m) IRR andsizeofproject (Disbursed IRR andcontinent 107 L DKK 588.1m) Latin America (Disbursed 77 L More thanDKK50m DKK 1,108.4m) (Disbursed (Disbursed DKK 69 L 64.6m) Europe 11 L DKK 1,751.4m) (Disbursed DKK Total DKKm (Disbursed 1,751.4m) 315 Total L 315 L 400 300 -200 100 0 100 200 300 400 400 300 -200 100 0 100 200 300 400

No. of projects No. of projects

Percentage which variesfrom-92.50%toasmuch11.52%. est IRR. project investmentsexceedingDKK50mdisplaythehigh- tion isincreasingovertime. ees constituted49%ofalltheexitedprojects.Thispropor- lished withDanishpartnershavinglessthan300employ- more than299people.Theproportionofprojectsestab- -100.0 -15,0 -10,0 --60,0 Percentage 10,0 15,0 -80,0 -40,0 -20,0 -5,0 20,0 40,0 Distributed onsectors,thereisagreatdifferenceinIRR Related tosizeofproject,thelargestprojectswithtotal 0,0 5,0 0,0 L I I I 34 L Less than100 Agriculture (Disbursed DKK 172.8m) DKK 348.4m) Total Loans Shares (Disbursed No. ofprojects 116 L 207 Manufacturing (Disbursed DKK 1,343.5m) L L I I I L Energy (Disbursed DKK 1.6m) 4 Total Loans Shares No. ofprojects IRR andsizeofDanishPartner DKK 107.4m) 11 L 100 -299 Construction (Disbursed DKK 29.0m) (Disbursed 38 L IRR andsector 16 Trade (Disbursed DKK 56.7m) L 12 Transport and Communication (Disbursed DKK 61.1m) L DKK 1,295.6m) More than299 (Disbursed L Finance (Disbursed DKK 9.6m) 2 161 L 27 Other service (Disbursed DKK 60.9m) L L Education and health (Disbursed DKK 0m) 0 DKK 1,751.4m) (Disbursed L 2 Total 315

Other activities (Disbursed DKK 16.2m) L 315 Total (Disbursed DKK 1,751.4m) L -1000 -800 -600 -400 -200 0 200 400 400 300 -200 100 0 100 200 300 400

No. of projects No. of projects -

IFU Annual Report 39 IFU Annual Report 40 E HNEI AH489.9 (855.3) (70.4) 681.7 (896.1) 999.3 560.3 301.5 258.8 NET CHANGEINCASH Net cashfrom(to)investingactivities 1.7 Disbursement ofprojectloans Paid-in sharecapitalinprojects Received fromprojectloans Received fromsaleofshares 489.9 Cash flowfrom(to)investingactivities Net cashfromoperatingactivities Interest andfeesfromprojectsreceived Dividends fromprojectsreceived Cash flowfromoperatingactivities 85.5 Cash flowfromprojectsexited1967-2004 316.4 (392.0) GROSS CONTRIBUTIONFROMPROJECTS 402.7 (167.7) 396.2 493.2 Other projectincome,net (143.0) Total contributionfromprojectloansandguarantees Write-offs andrealisedexchangerateadjustment,interestfeereceivables Write-offs andrealisedexchangerateadjustments,projectloans Interest incomeandfeesrelatedtoprojectloansguarantees (14.9) Contribution fromprojectloansandguarantees Total contributionfromsharecapitalinvestments Write-offs andrealisedexchangerateadjustments,dividendreceivables Share capitalwrittenoff(relativetocost) Income fromsaleofshares(relativetocost) Dividends fromprojects Contribution fromsharecapitalinvestments Contribution fromprojectsexited1967-2004 while DKK85.5moriginatesfromloansandguarantees. this amountoriginatesfromsharecapitalinvestments, tribution fromprojectsofDKK489.9m,402.7m from since1967showsthatIFUreceivedatotalgrosscon- The calculatedcontributionfromthe315projectsexited Accumulated accounts flow ofDKK-70.4m. 560.3m whileinvestingactivitiesgeneratedanetcash ing activitiesresultedinapositivenetcashflowofDKK project sampleduringthesameperiodshowsthatoperat- The calculatedcashflowonprojectactivitiesforthesame DKKm DKKm Percentage after projectstart-up.Inthefollowingyearsmortality 12% ofallprojectactivitiesstopwithinthefirst12months higher thanforprojectswithlargerDanishpartners.About projects withrelativelysmallDanishpartnersisgenerally eration 14yearsaftertheirstart-up.Themortalityratefor project ageshowsthatabout80%oftheprojectsareinop- A surveyofthe“mortality”rateforprojectsasafunction Project mortality 10% 12% 14% 16% 18% 20% 0% 2% 4% 6% 8% 1234567891011121314 Mortality ofIFUprojects Project age fulfilment ofIFU’s purpose. 80% oftheIFUprojectssurviveandthuscontributeto no operationalstopshavebeenregistered.Thismeansthat start-up toaprojectageofabout14years.Afterthatperiod IFU projectsstoptheiractivitieswithintheperiodfrom rate fallstoalmostorbelow2%ayear. Allinall20%ofthe Employees Total More than300 100 -299 Less than100 ScanCom, Vietnam

IFU Annual Report 41 IFU Annual Report 42 Four examplesofIFUinvestments produce sub-components atalowercostthan presently. plan tostartproductioninlow-wage countriesinorderto and ECMaskinfabrikinEgtved. two othermachineworksareRool MaskinfabrikinKolding nents forbothwindmillblades andofficefurniture.The India, whichamongotherthingswillbeproducingcompo- of threesmallmachineworksbehindthesteelfactoryin aging directorofBrdr. JensensMaskinfabrikinVejle, one Jensen, chairmanoftheprojectcompany. Heisalsoman- and oftheDanishTrade CommissioninIndia”,says Lars contacts. We havebenefitedalotfromthe supportofIFU abroad, andIFUhasbeenveryhelpfulinsettinguplocal and financialassistance. with IFUissignificantbothwhenitcomestocounselling Danish SteelClusterinBangalore,India,thecooperation many ways.FortheDanishpartnersbehindcompany oping countriescanbenefitfromcooperatingwithIFUin Danish companieswithnoproductionexperienceindevel- Outsourcing forsurvival They haveallexperiencedhow severaloftheircustomers “None ofushaspreviousexperiencewithproduction company. is alsorepresentedontheboard ofdirectorstheproject corresponding toDKK3.3m,and aloanofDKK2.0m.IFU has co-financedtheprojectwith 47%ofthesharecapital, price ofsimilarcomponentsproduced inDenmark. steel componentsproducedinIndiaat30-50%belowthe that thecompanyexpectstobeablekeeppriceof ments madebythethreefactoriesbefore.Thereasonis entered intocustomeragreementslargerthananyagree- rated untilFebruary2005,butthecompanyhasalready in India.Thenewlybuiltsteelfactorywillnotbeinaugu- board hopesthatthecompanywilldevelopalocalmarket only focusonexportstoWestern Europe, butlaterthe source theresttoIndia.Atfirst,projectcompanywill plan tomakespecialisedproductioninDenmarkandout- create new–andmaybeevenmorejobsinDenmark.They they expectthatmovingtheheavyproductiontoIndiawill necessary inorderforthemtosurvive.Butatthesametime Therefore, thethreecompaniesbelievethatoutsourcingis In additiontoprovidinglocalcontacts toauthorities,IFU Danish SteelCluster, India in offeringfast and reliabledataconnectionsat reasonable Internet supplierinthecountry. EWA hasbeensuccessful services forthreeyears,thecompany isalreadythelargest Emperion West AfricaLtd.(EWA), hasonlybeenselling its Africa andapartoftheMiddle Eastwiththoseservices. structure andleasedsatellitecapacityinordertocoverWest developing countries,andEmperionhasbuildtheinfra- data connections,e-mailservicesandIP-telephonyinmost based communicationsservices.Thereisanobviouslackof 2002, butisalreadyexperiencingagreatdemandforitsIP The DanishcompanyEmperiononlystarteditsactivitiesin Great demandforcommunication inWest Africa the project.Within ashortperiodoftimeViroGates hopes structure ishighlydeveloped,whichmakesiteasiertorun ple hereareinfectedwithHIV. Atthesametimeinfra- which toproduceandmarketsuPARnostic™, asmanypeo- measurement on-sitewithoutspecialexpertise. brought toruralareasinaLandRoverandcanbeusedfor ViroGates’ product(suPARnostic™), however, canbe blood samplesmustbekeptcoldpriortotesting. cialized andcostlyequipment,thefactthatcollected the requirementforstaffwithspecialtraining,highlyspe- to useinmanydevelopingcountries,forreasonssuchas rently available,itremainsfarmoreexpensiveanddifficult health. where themedicinemaynotbeeffectiveenoughtorestore tient’s immunesystemmayhavedeterioratedtoalevel the otherhand,iftreatmentisappliedtoolate,pa- early, thevirusmaybecomeresistanttomedicine.On ies forupto15yearsbeforeitturnsintoAIDS. olutionary impactonthefightagainstAIDS. pectations, astheprojecthaspotentialtomakearev- and theDanishscientistsbehindViroGates havehighex- ViroGates ApS. Ltd., whichisasubsidiaryoftheDanishbiotechcompany ticipates intheprojectthroughViroGates SouthAfrica can monitorthedevelopmentofHIVinapatient.IFUpar- is theproductionandintroductionofanewproduct,which One ofthenewprojectsinwhichIFUparticipated2004 Low-cost fightagainstAIDSinSouthAfrica In spiteofthefactthatEmperion’s subsidiary inNigeria, ViroGates haschosenSouthAfrica asthefirstcountryin Although thereisanothermethodofmeasurementcur- If antiretroviraltreatmentofthesepatientsisstartedtoo People infectedwithHIVmaycarrythevirusintheirbod- Even thoughtheprojectisjustgettingstarted,bothIFU with them.To strengthen UTL’s technicalandmanagerial ator, UnitedTelesys Ltd.(UTL), andstartedcooperating was thatthecompanycameinto contactwithalocaloper- are employedwiththecompany. growth rateof50%in2004. As oftoday50localpeople the greatdemandingeneral,companyisexpectinga lines inNigeriaforthe140millioninhabitants,anddueto and banks.Thereareonlyapproximately750,000land sities, largeemergencyrelieforganisations,oilcompanies the ownerofasmalllocalInternetcafétonationaluniver- prices. Theircustomersareverydifferent;theyrangefrom loan ofDKK2m. strongly thatIFUcouldplayafurthersignificantrole.” into thoseothercountrieshardesthitbyHIV, wherewefeel ment asafirststepinsupportingourpossibleexpansion Gates, IanLaquian. in developingcountries”,saysmanagingdirectorofViro- of theFund’s years-longexperienceanduniqueexpertise working withIFUisagreatadvantage–notleastbecause of theworldinyearstocome.“Inthatconnection, also planstoexpanddevelopingcountriesinotherparts to besellingitsproductalloverAfrica,andthecompany The reasonwhyEmperionstarted itsactivitiesinNigeria IFU hasco-financedViroGates SouthAfricaLtd.witha “More thanmerefinancing,welookuponIFU’s invest- ViroGates, South Africa

IFU Annual Report 43 IFU Annual Report 44 people directly. for atotalofDKK40.8m.Today thefactoryemploys2,500 in Vietnam withacombinationofloans andsharecapital 2003 IFUco-financedanexpansion ofScanCom’s factory produce woodfurnituretothegroup. tractors inVietnam, whereapproximately20,000people wood thatisshippedincontainerstoScanCom’s sub-con- the sawmilling,dryingandtransportofcertifiedtropical 500 peoplearenowdirectlyorindirectlyemployedwith sibilities offeredbyglobalisation:InBrazilapproximately in manywaysbeencapableoftakingadvantagethepos- world’s poorestcountries–mainlyVietnam. ScanComhas ment toapproximately25,000peopleinsomeofthe into alargeinternationalgroup,whichprovidesemploy- tractors inVietnam, buttodaythecompanyhasdeveloped Forest StewardshipCouncil. turer ofgardenfurniturewithtropicalwood,certifiedbythe has grownrapidlyandbecometheworld’s largestmanufac- most internationalcompanies.Infewyears,thecompany hagen, ScanComInternationalA/SisoneofDenmark’s Based inKorsør, some150kmsouthwestofCopen- Global successwithgardenfurniture with thecooperation. ficer ofEmperionandboardmemberinEWA, ispleased the company, andSteenEckardt,whoischieffinancialof- DKK 7.6m.Themoneyisearmarkedfortheexpansionof tion withIFUthatgrantedaloantothelocalcompanyof ceived 40%ofthesharesinDanishcompany. should takeoverallofUTL’s activities.InreturnUTLre- competencies, itwasagreedin2004thatEmperion IFU participatesinthreeprojects withScanCom.In Initially, thecompanyonlytradedwithafewsub-con- “We expecttogainlargeadvantagesfromthecoopera- At thesametimein2004,Emperioninitiatedcoopera- “The sizeofthe investmentmeantthatwe would not the parentcompany”, saysPoulErikBrønsholm. IFU thatwehavealsoinvitedthe Fundtojointheboardof ners. Infact,wearesopleased withthecooperation many newcontacts,whichhave affectedourchoiceofpart- porting ScanComVietnam Ltd. which haveledtoDanida’s PrivateSectorProgrammesup- IFU facilitatedcontactsbetweenScanComandDanida, mere financialpartnership.ForexampleinVietnam, where tion withIFU,therelationshiptodaygoeswellbeyonda advantages thatScanComhasobtainedfromitscoopera- tends toparticipatewithaninvestmentofDKK6.0m. sawmill andkilndryingoperationinBrazil.ThistimeIFUin- the Grouptoworkonestablishmentofyetanother increasing demandforScanCom’s furnitureinEuropeled the installationofnewkilndryingequipment.Subsequently, managed eucalyptusforests,andIFU’s loanhelpedfinance company purchasesandprocesseswoodfromsustainably ScanCom’s subsidiaryinBrazil,ScanComdoBrasil.The International, PoulErikBrønsholm. participation ofIFU”,saysmanagingdirectorScanCom have beenabletoimplementtheexpansionwithout ers theentireAfricancontinent. ready signedupforathirdsatellitesubscriptionthatcov- other partsofAfricainthenearfuture.Emperionhasal- cooperation withIFUwhenthecompanyisexpandingto says SteenEckardt. in awayisseenasanofficialrepresentativeforDenmark,” and tobeprotectedfromcorruption.IFUisapartnerthat will. We hopetobetakenmoreseriouslybytheauthorities, tion. IFUiswellknowninNigeria,andtheyprovidegood- “Due toIFU’s extendedlocalknowledge wehavemade Although initiallybasedonthefinancialandeconomic Subsequently, in2004,IFUgrantedaDKK9.1mloanto The chieffinancialofficeralsohopestobenefitfromthe ScanCom, Vietnam IFU aspartner G G G Co-financing throughIFU G G G G With IFU’s moneycomesadvice G G IFU’s financingisalsoimportant G G Investors indevelopingcountrieshavegoodreasonstoseekcooperationwithDanishcompanies G G G G Through partnershipwithIFU,Danishcompanieswill advisers bycollaboratingwithIFU–inadditiontofinancing,ofcourse! Partners gainaccesstocomprehensiveknowledge,contactsandaworldwidenetworkof trepreneurs fromdevelopingcountriesfinditeasytoseeeyewithDanishbusinessmen. by theDanishstate. Benefit fromtherespectwhichIFUenjoysininvestmentcountriesbymerefactthathasbeenestablished Gain accesstoIFU’s advisersinthegeographicareasquestionorwithinspecificofexpertise. Gain accesstoIFU’s experiencefrompreviousinvestmentsinthesamesectororcountry. Gain accesstoIFU’s generalexperiencefromactivitiesincountrieswithdifficultinvestmentconditions. G G G G IFU’s partoftheprojectfinancing Development ofEnterprise(CDE)andfromtheAfricanProject DevelopmentFacility(APDF). For projectsinAfrica,IFUcanassistobtainingsupportfor carryingoutstudiesandtrainingfromCentrefor short termfinancinginthehostcountries. Based onIFU’s knowledgeoflocalfinancingconditions,IFUcanincreasinglyhelpidentifysourcesforlongand other membersoftheassociationEuropeanDevelopmentFinanceInstitutions(EDFI).Seepage48. Financing Corporation(IFC),theEuropeanInvestmentBank(EIB),Nordic(NIB)and12 IFU cooperateswithanumberofinternational,EuropeanandNordicsourcesfinancing,includingtheInternational Thanks toitsextensiveexperienceIFUiscapableofputtingtogethertotalfinancingsolutionsforprojects. project partnersandthemanagementtobenefitofcompanies. IFU normallytakesaseatontheboardofprojectcompanies.InthiswayIFU’s experienceissharedwiththeother into thestrengthsofpartnerships,andalsotheirpitfalls. IFU hasuniqueknowledgewhenitcomestopartnerrelations.Throughtheyearsgainedconsiderableinsight In thesamewayIFUhasgatheredgeneralexperiencefromavarietyofbusinesssectors. With investmentsinmorethan 70countries,IFUhasaccumulatedspecificcountryexperiencefromallovertheworld. e.g. fromcommercialbanks. where itishardtofindalternativemeansoffinancing, IFU wascreatedtotakerisksandprovidefinancing The riskissharedamongseveralparties. sectors. Danish companieshaveadvancedtechnology, competentmanagementandholdastrongmarketpositionwithinmany Because theDanishbusinessstructureischaracterisedbysmallenterprisesandahighnumberofentrepreneurs,en- For smallprojectsIFU’s co-financing maygoupto50%ofthetotalinvestment. IFU cannormallyco-financeup to30%ofthetotalprojectinvestment,includingworking capital. from otherfinancialinstitutions. IFU maysubscribeforsharecapital,providemezzaninefinancing, grantloansandissueguaranteesfor IFU’s partoftheequitycapitalshall always besmallerthanthatoftheDanishpartner. Since the2004capitalreduction, themaximumamountIFUmayinvestinasingleproject isDKK50m.

IFU Annual Report 45 46

Eligibility withdraws. IFU’s shares are sold at market terms or in some Both large and small projects, including pilot projects, cases on conditions agreed by the partners at the begin-

Annual Report are eligible for financing. This applies whether they are ning of the project. The revenue thus earned by IFU can

IFU greenfield projects, expansion of existing projects or pri- then be used for new investments. vatisation of state-run businesses. The investment is conditional on IFU viewing the project IFU’s sister funds and international cooperation as commercially viable and on the participation of an expe- IFU administers two sister funds, IØ and IFV. IØ operates rienced Danish company. in Central and Eastern Europe, while IFV stopped making Host countries of investments must be on the OECD-DAC new investments in 2004. list of development aid recipients, and per capita income The three funds are collectively termed the Danish may not exceed USD 5,295 (2005). International Investment Funds. The Funds are members of the European Development How IFU works Finance Institutions (EDFI). This is an organisation created IFU recommends that interested companies contact IFU by its members with the objective of furthering mutual co- early on during preparations. In this way they will be able operation between the 13 EU development finance institu- to benefit fully from IFU’s participation. tions and developing common interests and a strong coop- In the beginning of the process, IFU may grant a prelim- eration platform in relation to the European Commission inary approval of the project – a declaration of Clearance in and its institutions, including the European Investment Principle. This serves as proof of IFU’s support in principle, Bank (EIB). and can facilitate negotiations with authorities, project partners and lenders. When preparations are drawing to a close, IFU will en- 100% Share Capital Share Capital & Loan No Local Partner / With Local Partner No Local Partner / With Local Partner deavour to arrange for the partners to meet at a final meet- ing, a so-called “pre-investment meeting”, headed by an 35% independent facilitator to ensure that all potential prob- 35% 60% lems are tabled, and that the partners share a full and clear 30% 60% understanding of each other’s business motives and obli- Share Capital gations prior to the final investment decision. 40% 35% ] The signing of the shareholders’ agreement and/or the 30% loan agreement between IFU and the partners marks the conclusion of the project preparations. IFU usually takes a 40% 50% 50% seat on the board of the project company, which allows the 35% Loan partners to benefit continuously from the Fund’s knowledge. ] Once the commercial and financial situation of the proj- ect company is consolidated – usually after 6-8 years – IFU I IFU I Danish Partner I Local Partner I Project Loans

IFU’s adviser network

IFU’s special expertise and local knowledge

Companies entering into dialogue with IFU can draw directly on a diverse group of IFU advisers, who have special expert- ise or local knowledge of the area in which project establishment is contemplated. At the end of 2004 IFU had 36 advisers in 18 countries around the world. The network is extended continuously with the purpose of offering the best possible guidance when it comes to choice of partners, preparation and implementation of the projects. Most of the advisers are senior businessmen with considerable commercial experience. They have run their own business or have held a leading position in a local company. They have in-depth knowledge of local business culture, investment authorities, local financing institutions, accountants, lawyers, etc. The advisers can be contacted through IFU. 47

India: Awareness of cultural differences Annual Report

India is a large market. However, suc- Institute of Management, Bangalore, India in 1989. He IFU cess in the Indian market comes only worked nine years with ICICI Bank, the second largest bank to those investors who understand the in India, financing large and small projects in southern Indian culture and society. Having India. Subsequently, he worked for three years as an Sridhar Sampath worked with both local companies and Investment Officer at IFU’s office in Chennai before be- with IFU, IFU’s Indian adviser in coming an independent consultant. Madras, Sridhar Sampath, is aware of the deep cultural dif- IFU’s contribution to a project goes far beyond money, he ferences between the largely family-run, feudal Indian says: “IFU brings in its vast experience, ethical business businesses and the ‘professional and rational’ Scandinavian practices, fair treatment of all stakeholders, concern for the style of conducting business. external environment, good working environment and most Sridhar Sampath obtained a degree in Chemical importantly a professional management style that is invalu- Engineering from Indian Institute of Technology in New able in a country like India.” Delhi in 1985 and Diploma in Management from Indian

Argentina: Wide international experience

Four years of economic crisis has re- Since obtaining a BA at Copenhagen Business School in sulted in high unemployment rates 1977 and an MBA at Fordham University in New York in and increased poverty in Argentina. 1987, Claus E. Madsen has acquired wide international ex- The political situation is also less sta- perience within several different business sectors. Among Claus E. Madsen ble than before, but the country is still other things he has worked as project manager within the moving forward and has several attrac- food sector for EAC in Thailand and the USA, and as mar- tive possibilities for foreign investors. keting director for Hydro Seafood in Denmark in addition to “Since the devaluation the market conditions in a number of years in Norway. Argentina have become particularly competitive”, says With this and more than four years of specific business IFU’s adviser in Buenos Aires, Claus E. Madsen, who knows experience from Argentina, Claus E. Madsen can offer of which he speaks in his capacity of managing director of Danish investors in Argentina competent advice about gen- ISS in Argentina, Uruguay and Chile. eral as well as specific business conditions in the country.

South Africa: Deep insight and network

Dr. Anders Aeroe can help you take ad- and Policy Division, Association of Danish Engineers vantage of the many opportunities in (1995-99). South Africa. In his experience, foreign investors are sometimes scepti- He is senior manager at the Western cal towards investing in South Africa, as they reflect concerns Anders Aeroe Cape Trade and Investment Promotion about the situation in Africa in general onto South Africa. Agency (Wesgro), and he also works as “This is a pity”, he says, “as South Africa with its ad- an adviser for IFU. From 1 January 2005 Anders Aeroe will vanced infrastructure, democratic constitution and a good be in charge of IFU’s Adviser Office in Cape Town. investment climate provides a fine framework for foreign The Danish adviser has a master’s degree in International investments”. Development Studies from Roskilde University and has ob- Anders Aeroe has lived in Cape Town and worked with tained a PhD in Industrial Economics from Copenhagen Wesgro for the last five years. His Danish background com- Business School. bined with an extensive network and deep insight into the Before he went to South Africa, he worked as export man- Western Cape business community makes him well suited ager with the Danish Federation of Small and Medium- to facilitate Danish investments into Cape Town and sur- Sized Enterprises (1993-95) and as head of the Research roundings. IFU Annual Report 48 Website: http://www.finnfund.fi Finland Finnfund countries inCentralandEasternEurope Geographical area:Developingcountries andnon-EUmember Instruments: Equity, quasi-equity, loans andguarantees Website: http://www.deginvest.de Germany Deutsche Investitions-undEntwicklungsgesellschaftm.b.H. Europe, EUcountriesexclusivelyequity Geographical area:DevelopingcountriesandCentralEastern Instruments: Equity, quasi-equity, loansandguarantees Website: http://www.cofides.es Spain Compañía EspañoladeFinanciacióndelDesarrollo Europe Geographical area:DevelopingcountriesandCentralEastern Instruments: Equity, quasi-equityandloans COFID Website: http://www.cdcgroup.com United Kingdom CDC Group Geographical area:Developingcountries Instruments: Equityandquasi-equity Website: http://www.b-i-o.be Belgium The BelgianInvestmentCompanyforDevelopingCountries Developed Countries) Geographical area:Developingcountries(LowIncomeandLeast Instruments: Equity, quasi-equityandloans Website: http://www.awsg.at Austria Austria Wirtschaftsservice Gesellschaftm.b.H. Europe Geographical area:DevelopingcountriesandCentralEastern Instrument: Guarantees (United Kingdom),DEG(Germany),FINNFUND(Finland), following EDFImembers(EUR50m):BIO(Belgium),CDC Investment FacilitythroughtheEIB(EUR90m)andby scheme. ItsfundingwillbeprovidedbytheCotonou will commitatotalofEUR140mforinvestmentswithinthis and thePacific.TheparticipatingEDFImembersEIB support privatesectorinvestmentsinAfrica,theCaribbean agreement, whichmarksthelaunchofaco-financefacilityto European DevelopmentFinanceInstitutions(EDFI)signedan In 2004theEuropeanInvestmentBank(EIB)and European FinancingPartners’co-financingfacility Website: http://www.swedfund.se Sweden Swedish InvestmentFundforDeveloping Countries Developing countriesandCentral and EasternEurope Geographical area: Instruments: Equity, quasi-equity, loans andguarantees Website: http://www.simest.it Italy Società ItalianaperleImpreseall'Estero Geographical area:Allcountries Instruments: Equityandquasi-equity Website: http://www.bmi-sbi.be Belgium Belgian CorporationforInternationalInvestment Geographical area:Allcountries Instruments: Equity, quasi-equityandloans Website: http://www.proparco.fr France Economique Société dePromotionetParticipationpourlaCoopération Geographical area:Developingcountriesandemergingmarkets Instruments: Equity, quasi-equity, loansandguarantees Website: http://www.norfund.no Norway Norwegian InvestmentFundforDevelopingCountries Geographical area:Developingcountries Instruments: Equity, quasi-equityandloans Website: http://www.fmo.nl The Netherlands Netherlands DevelopmentFinanceCompany Developing countriesandCentralEasternEurope Geographical area: Instruments: Equity, quasi-equity, loansandguarantees members. In2004themembersofEDFIwere: and guaranteeswillalsobemadeavailabletotheEDFI expected thatinstrumentscomprisingequity, quasi-equity mezzanine loanswithadebtcharacter. Earlyin2005itis ration withEDFImembersintheformofseniorloansand ited toprovidingfundsforfinancingofprojectsincollabo- financing bythefacility. Initially, theschemewillbelim- the amountofIFU’s ownfinancingofaprojecteligiblefor For IFUthismeansthatthefacilitymayprovidethreetimes FMO (theNetherlands)andPROPARCO (France). Investment portfolioasat31December2004 OR rwr eee 782. 40.3 2003- 25.6 1,800 100.9 17.8 27.3 27.3 27.2 Cerekem Brewery A.P. Møller-Mærsk Productionofbananas Singa BananaPlantations NOBRA oaa osrcinE il&Sn28406.9 4.0 2.8 E.Pihl&Søn Construction Cocadac le niern adrTpø . . . 01971-1977 1996- 1978-1981 50 1,000 550 625.6 3.0 * 2000-2002 2002- 14.0 16.1 240 65 47.9 357.2 28.0 50.5 0.6 1989- 0.8 2000- 54 0.0 1999- 30 0.0 50.0 500 34.1 0.6 3,471.3 3.3 8.5 100.0 7.0 FLSIndustries 4.7 11.4 6.8 7.0 0.0 Christiani&Nielsen 5.2 HaldorTopsøe 0.0 NovoNordisk Cement BurgessAviation 50.0 Construction 7.3 Engineering 8.6 Pharmaceuticals Nova Cimangola CarlBroGruppen/Globe Angola Aviation Total 4projects Cosider Managementservices A.P. Møller-Mærsk Aviation AssistanceAlger Altec BWSC Aldaph Transport relatedprojects Algeria Total Infrastructureprojects 3projects Mærsk AfricaFacility AMSCO African Infrastruc.Fund *Africa (Regional) AFRICA atxCohn rntx43801. 50201984-1991 200 * 1987-1988 35.0 1982-1996 1976-1986 350 1987-1988* 40 30 435.0 25 3.0 30.0 10.0 12.5 2000- 1987-1997* 8.0 300 * 1976-1982 25 1976-1995 109.4 * 1970-1999 8.9 1.6 4.3 350 1977- 1993-1995 6.0 58 25 30.1 42.0 # 9.2 * 1983-1984 600 20 2002- 1997- 32.0 30.1 15.0 83.0 15 20.5 2.3 195 6.9 6 22.3 2.1 Brandtex 4.0 33.5 1985-2001 0.0 1.8 0.9 130.0 DanfarmContractors 12.4 1985-1996 21.5 90 BuhlAutomation 14.6 38.6 0.4 5.4 1.7 PrimodanDairyEquipment 4.8 350 8.7 Proteinkemisk 0.0 63.0 9.3 33.0 Pulpandpaperproducts 5.4 320.0 1.1 Clothing 1.4 13.5 Researchanddevelopment 5.0 0.0 Dairy farm SAS Hotels 16.8 5.3 0.5 1989-1996 ScancoolInternational 1.0 Dairy E.RothOversøiskHårdtræ 0.7 El RayanDanfarm 19.9 40 HelsingørVærft 26.6 11.1 Egypac Hoteloperation Powderedmilkpacking 0.3 12.9 NordiskTrælast Dantex 15.6 CLFF 4.0 26.6 Al QuseirHotelCompany FanMilkInternational Sadolin FanMilkInternational Egypt DanishWood Treating 4.2 NoDanishpartner Construction Total 2projects Wood products Furniture Dilaz 9.7 Danilait 1992-1996 Chemicalindustry Democratic Rep.Congo Financialinstitution Dairyproducts GEANiro/DaniscoSugar 2.2 Wood products Icecream 1997- 1991- Bryggerigruppen 6.7 Total 8projects 12 0.0 West AfricaGrowthFund Sitransbois 1.2 22 170 1.0 Sedan 3.1 1999- SAM 105.0 Sugarrefinery Sadofoss 1.8 1.0 Finamark 55 0.0 Fan Milk Brewery 6.9 CITB 0.0 Côte d'Ivoire 4.2 0.7 0.3 Scancatrans Total 13.8 1project 0.7 SOGESCA SønderstrupSæbefabrik 0.7 Central AfricanRep. 6.9 DPD Total 1project 0.7 1.7 Landtransport Ceris 8.6 Chemicalindustry Cape verde 0.4 1.7 Total 5projects Poultryfarming FanMilkInternational Camtainer FiboMaskiner FanMilkInternational Camsavon Distrubutionofdairyproducts Cameroon Total 1project FanMilk International Avicom Distributionofdairyproducts Burundi Dairy Cement Total 1project Fan Milk Burkina Faso Total 3projects Fan Milk Fan Milk Cimbenin Benin Total 1project ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm 214. . 0. 905 402.2 584 1.4 3,621.3 42.6 11.7 22.1 12.2 50.0 15.9 264. 621. 4. 1,269 346.4 14.2 86.2 49.1 52.6 2,255 558.9 27.3 84.2 63.5 23.7 . . . 6050 16.0 1.8 0.4 2.3 90 63.0 19.9 40 15.6 4.0 4.2 2.2 237 110.2 1.2 7.6 1.0 15.8 8.6 9.0 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation 662. 2. 350 320.0 26.6 26.6 1,000 625.6 16.1 47.9 50.5 . . . . 22 1.8 0.7 0.7 0.7 0.0 0.0 0.0 0.0 1. 518-95* 1986-1995 15 412.0 00301976-1982 300 10.0 501018-95* 1984-1995 100 35.0 . 018-98* 1986-1988 40 1.0

IFU Annual Report 49 IFU Annual Report 50 ot ri uryOeAkl21254000903 1991-1999* * 1997-1998 30 * 60 1997- 9.0 3.7 30 10.5 0.0 1998- 2001- 1989- 1998- * 1997-2003 4.0 1972-1975 1.3 100 1995- 80 110 80 4 25 17.6 2.5 50 1.3 34.1 12.9 7.5 6.0 2001- 3.0 27.0 2.1 1.6 1.3 0.5 40 1.0 2002-2004* 1.6 5.3 0.2 16.6 1.6 2.0 7.0 1.0 50 5.3 15.4 3.1 1.0 OveArkil 1.0 * 24.0 1980-1982 1.2 1992-2000 2.9 Brdr. Kristensen 0.9 1.9 15 2000- 2003- 1.3 1999- 220 3.8 Air Muk 0.5 FanMilkInternational 2.0 700 600 400 16.6 0.6 Quarry 1,501.0 1,200.0 J.HvidtvedLarsen 639.9 Dalhoff Larsen&Hornemann ScanbechGroup Fishing PhønixContractors Propharma 39.7 Productionofplasticbottles 56.8 Airtransport 72.2 EliasB.Muus 1.2 39.7 56.8 Waste Collection 7.1 Dairy 72.2 Wood products Pharmaceuticals Volta Arkil Coldemulsion 4.0 Scanbech Ghana 31.8 7.4 Pako Bay 1.1 Northsax KilnCompany Muk Air Feedmill ScandiWood Larsen Ghana 52.4 39.6 56.7 Ghana Emulsion Production ofwoodproducts Fan Milk Danafco KjaerGroup Carpo ScandiWood Ghana Ghana A. P. Møller-Mærsk Aalborg Portland Carsalesandmaintenance AalborgPortland DanishProteinInstitute HelnanInternational Total 2projects Researchanddevelopment Muus African LakesEthiopia Hotelsandrestaurants Containerterminal Ethiopia Cementproduction Cementplant Total 10projects Suez CanalCont.Term. Sinai WhitePortl.Cement Sinai CementCo. Hotel Marina EPL urs otigSf rnsCrkm8265140101983-1988 1983-1997 120 1979-1999 1981-1999 * 1999-2000 150 1977-2003 1976-1979 104.0 64 120 2000- 144.0 550 1,400 65 1988-2003 100.0 * 101.0 1983-1986 25 416.0 1,980.1 * 1984-1996 4.0 57 60 32.8 1999- 6.5 1982-2003 100 52.0 8.6 20.0 1985-1998 2,200 2004- 23.0 950 3.3 5.4 6.3 2002- 108.0 38.2 40 50 440.0 2004- 0.8 9.7 24 0.3 25.7 23.1 8.2 25.0 4.4 1990-1998 35.4 42.5 75 0.0 10.0 87.4 4.5 29.6 55.5 4.1 1 * 1981-1986 4.2 * 1986-1997 31.7 1989-2001 7.0 0.0 16.1 1.0 AlkalineBatteries 50 2.9 110.0 1999- 1.0 30 25 7.0 0.4 Cerekem Bryggerigruppen 16.0 4.0 19.0 1993-2004 Bryggerigruppen 12 95.0 2.5 Dyrup&Co. 2.0 Bryggerigruppen 1984-1995 7.2 1.3 0.2 A. P. Møller-Mærsk 1.0 F.L.Smidth 10 FanMilkInternational 27.7 260 Batteries NTRHolding 1.1 1.4 Softdrinks 4.0 Production ofcement 34.0 2.8 3.8 Bryggerigruppen Container terminal Softdrinks Brewery Total 16projects 0.0 Milling plant 32.8 * 1999-2000 Cerekem W.African 0.3 PortlandCement Paints UnitedMillingSystems 1986- 10.0 Grundfos W.Africa ContainerTerm. Bryggerigruppen Tiger Construction 25.4 Battery 27 Sunrise Bottling Dairy Agricultureandfarming 30 Machinery andequipment 6.7 1972-1980 Plateau Bottling 0.0 Construction Pioneer Milling Agricultureandfarming Emperion 0.3 8.7 4.9 6.2 Peacock Paints 22.8 35 1.5 Nyati Nwankwu &Rasch 3.7 0.4 Flourmill Internet relatedactivities JIB 4.8 Grundfos Pumps 3.0 4.1 Fertile Acres Fan Milk 1970-1978 Nyati Emperion West Africa Schmidt&Jessen O.G.Hoyer 1.8 1995- O.G.Hoyer 11.8 DEMCO 0.4 York Refrigeration BARC 1 ExpansionofBeachLodge 1970-1978 KjaerGroup Adegbemile 10 Lodge 13.8 Machineryandequipment Nigeria 1997- 2003- 5,000 22.0 1.1 Saleandserviceofcars Total AlkalineBatteries 4projects 0.3 8.2 York Refrigeration 1.2 34.0 Nyati Mozambique 7 90 Feedmill Nyati BeachLodge 1.3 Trade Motorcare Mozambique Dairy Frigo Services 1.8 186.6 140.0 Mozambique IntertecContracting Service company 0.7 Total 4project 6.5 3.9 Batteries 7.1 York RefrigerationMorocc 2.1 Ettamam Cool Time 5.0 0.8 14.2 Comapral ABCHansen 4.0 Water supply Morocco EliasB.Muus 13.2 1.3 0.8 Total 1project 3.9 Somapil 23.0 Vestergaard FrandsenGroup Mali 0.1 Flourmilling Total 1project 32.6 Scandrill DCKProduction Feedmill Malawi DCKProduction NoDanishpartner Total 1project Agricultureandfarming Tantina Milling Textiles BurgessAviation Agricultureandfarming Lesotho Operationalleaseofaircrafts Financialinstitution Total 6projects Vestergaard-Frandsen Muus DCK-Production DCK-EA Aviation Lease Acacia Fund Kenya Total 10projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product 9. 9829018839192,855 3,971.9 198.8 229.0 79.8 199.4 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm 851759. 0136446,041 3,644.4 30.1 97.8 197.5 98.5 91 225.4 33.1 25.4 10.5 5,143 393.8 8.9 27.8 584 47.2 135.3 39.3 11.0 31.3 23.3 15.8 . . . 7075 27.0 1.0 0.9 4.5 . 151. . 14136 71.4 3.8 14.2 11.5 260 8.0 34.0 30 22.8 6.2 4.1 4.8 11.8 1.8 13.8 1.2 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation . . 27 4.9 0.3 209 1986-2003 90 52.0 ioae eiiet obtAD ioae . . 2004- 5 2001- * 2000-2001 4.0 20 * 1995-1999 1999-2004 80 1999- 2004- 2.9 30 7 1998-2004 * 3.1 1996-1999 15 1995-2000 70 2.1 12 1.1 1998- 1.0 30 2.7 20 37.5 7.8 1996-2001 20 2004- 1.3 1.0 2.0 4.5 0.8 2002- 2003- 12 5 5.5 1998- 1.0 2000- 0.2 31 10 0.9 0.2 * 1997-1999 3.4 1.0 270 10.0 2003- 8 0.4 0.7 * 1997-2001 3.7 1.0 6.5 50 0.9 0.2 45.4 0.2 1.9 35 0.4 54 10.3 1.0 0.6 1.0 1997- 1998- 2.2 2.5 1.0 1999-2004 8.0 8.0 0.3 3.8 0.3 * 1980-1983 2003- 0.9 25 4.3 Virogates 70 2004- 2.3 20 2.5 20.3 0.8 2.4 20 0.2 30 Time Out MedicinetocombatAIDS 0.4 2.6 0.8 5.8 9.8 6 2.7 13.9 2.1 2.5 2.0 1987-1996 LadelundSkilte 1.0 11.8 Toni-Armatur 2.4 * 1982-1985 Time Out ABCHansen CoursewareScandinavia 4.9 0.0 1.5 Brandedsportswear 0.4 8.5 75 CarlBroGruppen 0.2 Productionofsportsarticles * 1985-1989 4.5 250 HotelPakhuset * Manufacturingofmills 1984-1999 Dokmand Productionofsigns 3.8 0.7 48.0 Virogates Nyati 2001- 30.0 100 2.6 Umtha Manufacturing 1.2 1.0 90 WaterToday's taps Signs&Graphics Hotelsandrestaurants Kristensen Group 0.4 Education ExpansionofSafariLodge 0.1 Time OutSA 47.0 200 Sign-Tronic Consultancy 0.1 Stoneground Mills 2.7 1.0 129.0 MorsøJernstøberi Sibaya ConservationProj. Prepressprint Danline 739.4 F.L.Smidth Production ofheatingproducts Euro-Matic Resource Dev. Consultants 0.5 FCKøbenhavn/Parken 4.2 Princeton Computing 14.9 0.7 Nyati SouthAfrica 2.0 Productionofplasticballs Signsandposters 0.6 Nielsen Tap 34.7 Restaurants SønderstrupSæbefabrik Consultingengineering Newave Technology 13.0 0.1 0.1 New AfricaSigns&Graph. 0.1 Kongskilde 2.0 37.7 Sportseducation Morsø SA(Pty) 34.3 Brdr. Jørgensen Kristensen Oceanfront Palsgaard Industri Bathtubs 3.4 DanishThatching Company(DTC) FLS AutomationSA Detergents&soap 29.8 Machineryandequipment 26.5 FCK-UPE SoccerSchool Bryggerigruppen Foodandbeverages Productionofthatchedroofs Euromatic Danline Bathroomware 8.0 KjaerGroup Distribution ofmaltdrinks Danish ThatchingCompany 10.5 Foodingredients 4.0 Danforge Engineering Atlas-DK APVEngineering Danafrica FlourMills Dan-Essence Credin BakerySupplies Agricultureandfarming Benzak Beverages P.F. Faromar Cardistribution South Africa AlkalineBatteries Servicecompany P.F. Faromar F.L.Smidth Total 1project Fishing/fishprocessing Motorcare SierraLeone Sierra Leone Productionofcement Fishing/processing Total 5project SOCA Batteries Senegal Seafood Rutec Ciments duSahel African Seafood Senegal Total 1project Sorwapiles Rwanda D ltigDTC opn/D . . 1992-1994* 5 5.5 * 1980-1996 1987-1997 40 * 1991-1993 250 * 1985-1996 1985-1996 25.0 80 14.0 2004- 41 68 * 1989-1992 9.3 60 1980- 22.0 1986-1995 10.0 35 82 32.1 1994- 2.7 170 4.7 1.0 0.9 63.0 1984-2003 15 * 1992-1997 34.0 2.0 3.6 1.4 1991- 1993- 10.7 400 6.3 1.1 60 4.9 D.T.C. Company/TDC 0.7 100 1.2 350 33.0 11.5 15.0 18.5 3.6 1974-1995 1.0 11.0 414.2 10.4 12.6 4.9 20.1 1.3 300 2.1 APVEngineering 1.2 * * 0.2 7.8 1994- 1993- Clothing 1977-1987 6.7 40.0 DKKemiInternational 9.0 Rambøll 1.2 # 1981-1990 2.0 4.4 160 FanMilkInternational 45 3.1 60 1999- 75.1 ErikConradsen Fabricatedmetalproducts 0.1 15 8.1 69.3 2.0 17.9 3.3 750 74.4 35.0 A.P. Chemicalindustry Møller-Mærsk NordiskWavin Dairy 6.0 Total 1project 1.4 7.7 88.5 11.0 Rubberandplasticproducts Mortensen&Lange 2.0 15.4 0.8 TDC Landtransport Tunisia Cerekem 11.0 Dairy 4.0 Total 10projects 9.1 1.4 Tropical PlantsAgencies Stevedoring STS 10.7 5.1 Sotodas Agricultureandfarming SkanskaJensen Water transport 1.7 18.1 Soprolait 2.7 Danea Agriculture andfarming 1.4 Lomé Terminal Services 8.3 La Gazelle Pre-Consult 5.9 Tanzania SAS HotelInvestment Hotelsandrestaurants ITP 1.2 Fan Milk 5.5 Cerekem Exotic Water transport Atlantic Produce Hotelsandrestaurants Africotière 0.4 17.3 Togo Airporthandling SkanskaJensen DaniscoBioteknologi Total 6projects International Plantations Fishing UnitedMillingSystems Tanruss Giersing Rose Hotelsandrestaurants RSP Transport Mount Meru Mashado GameFish.Lodge Den-Tan Resources Rehab.ofrailwagons DAHACO Dryyeast Tanzania Plantations Flourmill Total 2projects United PlantationsAfrica KGR Enterprises Swaziland Total 2projects SMS Milling SFI Sudan Total 24projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm 207. 903. 4. 635 947.4 34.7 89.0 71.3 22.0 216. 7613214926 221.4 1.3 57.6 64.5 1,285 22.1 577.8 11.9 795 105.9 106.4 94.8 9.8 24.4 19.6 905 2.7 181.2 17.3 23.0 44.1 44.2 15.6 . . 1830 11.8 100 4.2 47.0 0.1 0.1 4.0 . . 5 5.5 0.9 75 41.0 12.1 9.5 5.9 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation

IFU Annual Report 51 IFU Annual Report 52 cnLc lsi lo ie ...Dnak0402232 1994-1999 20 1996-2003 2.3 50 # 1993- 1997-2003 1995-2001 * 1995-1999 34.0 2001- 1992-2002 120 70 50 2000- 10 300 25 67.0 2.5 11.5 2001- 0.2 90 2.0 8.1 2.4 70 1994-1995 2003- 6.3 33.5 1.2 1998- 0.1 200 130 5.0 7.5 5.5 4.0 0.3 1.2 0.4 150 60.0 20.3 0.4 2.1 1.3 2.0 5.5 13.8 3.4 1998- 0.1 1988- 0.2 4.3 1.8 2.0 * 1998-2002 26 1998- 0.6 1.2 I.P.E. Danmark 0.3 50 9.4 2003- 4.3 1988-1998 0.3 1.2 56 0.6 34.1 45 1.2 16.0 85 5.5 1.9 60 2000-2003 MaskinfabrikkenDerby 1998- Frese 10.4 Oppenhejm&Jansson Plasticfloortiles 5.7 2001- 15.1 1.2 2.0 14.1 InnovisionR&D Pfeiffer/Globe DanishRefrigeration 12.0 NoDanishpartner 5.5 10 60 3.0 Energyproduction/distribution 22.0 40 Coolersandfreezers Plumbingequipment NoDanishpartner Machineryandequipment 17.3 8.5 2.4 44.5 Reflectiontextile 5.0 19.4 3.2 Refrigeratorsandcoolers NoDanishpartner Meatprocessing Meatprocessing Scan-Lock 3.0 3.0 Springkildegaard 1.3 Ref-Air-Engineering 3.6 2.6 UnitedMillingSystems 7.0 Powervision 0.5 Metafold Investments 3.0 Springkildegaard 5.5 Imperial 3.0 1.3 11.7 Meatprocessing Frese 9.5 3.0 1.0 Dansafe Broilers/dressedchickens Danmeats 8.8 Colcom Maizemilling 9.3 Farming 4.0 Ballantyne Butchery 1.0 Zimbabwe KnebelDrilling Ascom 3.2 Total 3projects Verino Farms C.C.BrunEntreprise Mechanicalengineering Milden Milling Victoria Pumps KnebelDrilling Victoria Pumps Chulumenda Zambia Steelfabricat./galvanization Fishing/fishprocessing Payphones A.P. KjaerGroup Møller-Mærsk Manufacturingofpumps Total 9projects Drillingofboreholes Sale/maintenanceofvehicles Victoria Pumps Operationofcontainerdepot Victoria Galvanization K2-Consult Victoria FreshFood ManagementandITconsultancy Victoria Engineering MTN Publicom Motorcare Uganda Maersk Uganda K2-Informatics (U) Drillcon Uganda re niomn oslac abl/oi041231995-1997 3 2003- 2004- 1996- 1.2 # 2003- # 1989-1999 106 2004- # 2004- 120 100 11 125 2003- 62.4 1.400 28.7 100 # 42.0 * 1993-2004 18.0 8.0 134.0 400 2004- 182.7 8 1997-2002 53.5 3.7 2002- 1987-1997 1995- 1.500 2.6 *# 1997-2001 90 155.0 3.0 # 150 3.7 380 60 1995-2002 13.5 10 1994- 2.6 1994-2003 7.0 1987-1994 147.4 14.2 15.0 210.0 172.0 13.5 100 160 1.0 150 90 2.3 5.3 14.2 0.4 46.7 10.7 # 42.2 1997-2004 40.0 20.0 2004- 4.1 0.8 6.2 11.3 1992- 3.3 3.5 241 6.3 45.4 39.1 400 27.7 2004- 2003- 6.7 160 14.9 1971-1976 Rambøll/Cowi *# 2001-2004 Kartoffelmelcentralen 0.0 41.9 41.9 60 GPVInternational 19.1 * 1986-1987 62.5 7.2 4.7 10 10.0 GPVInternational 100 150 2003- 6.8 GNResound 0.8 HecoHolding 3.5 * FlexaHolding 1987-1990 9.6 134 Machiningand milling 6.0 6.0 7.5 17.8 101.4 * 28.6 1991-1992 Starchproducts 550 9.1 Sko Ecco 5.5 Consultancy Shipmotor components 2004- 8 Kampsax/Vejdirektoratet 60.0 7.0 EccoSko 0.4 EccoSko PCB production 105.9 7.5 80 22.4 9.1 Huhhot HuaOuStarch EAC(Hong Kong) 0.8 180 1.3 Hearingaids 5.3 DaniscoIngredients Heco MechanicalSeals 7.0 3.0 Green Environment 28.0 11.7 Furniture Production ofshoes 46.7 GPV China 0.8 1990- GPV (Suzhou)Co. 3.0 Realestateactivities Shoe production 2002- Danfoss Consultancy Tannery 11.7 6.5 GN Resound(China) Medical/precisioninstruments CodanGummi Flexa SuzhouFurniture 800 Foodingredients EAC(Hong Kong) 12.8 DISA Danagraf ECCO Tannery (Xiamen)Co CodanGummi 2.0 45 Coloplast 9.0 2.9 30.0 ECCO Shoefactory 2,500.0 Airpollutioncontr. products CodanGummi ECCO (Xiamen)Co. Electricalmachinery/equip. Rubberandplasticproducts 12.8 5.9 Publishingandprinting East LakeVillas 13.1 1.0 1.5 DISA (Changzhou)Machin. 58.0 Codan Gummi Danisco (China) Rubber hoses 5.0 Danhua Bestseller 61.1 Danfoss Automobileparts PVCpipes CarlsbergBreweries 3.0 Danagraf China Heidelberg Dalian Xinshiji 52.3 Automobileparts 16.4 Productionandsaleofbeer Coloplast CoolSorption Codan LingYun 0.6 BB Electronics Publishingandprinting 1.0 Chinaust Shanghai Productionofvapourrecovery AVK Gummi MetroTherm 41.7 Dumex Chinaust Plastics Chinaust Changchun Clothing NordiskWavin Productionofwaterheaters Electroniccomponents Carlsberg Qinghai AalborgPortland 2.3 BlueStar CoolSorption Bestseller FashionGroup Chemicalindustry Technical rubber HaldorTopsøe Beijing SunpuEl.Appl. Whitecementproduction DandyHolding HaldorTopsøe BB ElectronicsChina Baihua AVK SealingTechnology PVCpipes Anqing WhiteCement China Chewinggum Total 1project Fertilizers Dumex Fertilizers Cambodia Dahetra Total 5projects Dyeingandprintingontextile Wavin KAFCO (Prom) KAFCO (Plant) Dandy Dahetra Bangladesh Bangladesh ASIA Total AFRICA159projects Total 10projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product 6. ,7. ,7. 5. 714428,517 17,154.4 456.3 1,178.7 1,070.0 666.7 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm 535. 402. 5. 432 157.3 27.1 64.0 51.9 15.3 635. 115. ,0. 1,067 2,608.1 58.0 61.1 54.5 805 46.3 163.4 8.7 29.6 10.5 21.5 . . . . 41480 94.1 5.5 5.5 3.1 8.0 . . . . 100 6.0 3.0 2.0 1.0 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation . 51993-1994 1993-1994 25 15 6.5 2.6 53

IFU Participation Total Total Total Employment Period Activity/product Danish Partner(s) Shares Loans Disbursed Outstanding Investment DKKm DKKm DKKm DKKm DKKm Persons Annual Report

Hydra Tech Hydraulic cylinders Hydra Tech 2.1 2.0 3.7 3.7 7.6 20 2003- # IFU Hydro-X Chemical industry Hydro-X 0.7 0.6 2.8 12 1995- Impact Furniture Production of sofas Eilersen 0.6 0.2 2.0 25 1999-2001 # Innovation Production of sofa sets Innovation Randers 1.9 1.7 5.0 20 1998-2000 International Nutrition Food and beverages EAC (Hong Kong) 41.0 6.3 43.9 115.0 180 1992-2000 # Jacob Holm Chemical industry Jacob Holm & Sønner 20.8 21.6 221.0 90 1995-2002 Lanzhou Huanghe Jianiang Production of beer Carlsberg Breweries 39.7 20.6 20.6 220.0 1.372 2004- Mærsk Container Production of ship containers Mærsk Container 13.9 14.7 6.8 206.1 600 1999- Ningbo Zhedong PVC windows Plastmo 1.5 1.3 13.0 60 1996-2000 # Novozymes (China) Pharmaceuticals Novozymes 54.1 71.0 1,160.0 360 1995-2003 Primo Kunming Plastic (PVC) windows Primo Danmark 0.6 0.7 2.5 20 1999-2004 # Qiaohong New Materials Co Sanitary fibre products Dan-Webforming 18.5 15.3 15.3 157.0 56 2001- # Rosti China Production of plastic parts Rosti 21.5 17.0 11.3 68.0 300 2002- Schrøder Plast Production of plastic products Schrøder-Plast 6.3 2.0 7.5 5.5 22.0 32 2000- # Shanghai Dansk Textiles Dansk HK 12.4 8.0 17.8 7.7 40.0 30 1995- # Shanghai Ovo Egg Prod. Pasteurised egg products Ovotec International 2.2 12.5 50 2001-2003 *# Shanghai Roulund Rubber and plastic products Roulunds Rubber 3.4 3.5 3.5 22.2 106 1996- Shanghai Trayton Trading Sale of polstered furniture Trayton Møbler 1.0 5.7 116 2000-2000 # SIDIC Consulting engineers Dangroup International 1.1 0.2 1.3 3.0 4 1987-1999 Silcon Electrical machinery/equipment Silcon 2.5 1.9 17.0 80 1995-1999 Smekru Consulting engineers Krüger 0.4 0.3 5.0 6 1988-2001 * Sonion ( Suzhou ) Electronic equipment Sonion Horsens 26.5 16.4 16.4 150.0 1,133 2001- # Tianjin FTZ TeamWork Office furniture and consult. System B8 møbler 2.8 2.2 11.7 24 2001- *# Tibet Lhasa Brewery Beer production Carlsberg Int. 48.6 47.2 47.2 286.7 243 2004- Ting Fung Starch Starch products Kartoffelmelcentralen 10.9 9.7 9.7 85.0 105 1996- Trayton Furniture Production/sale of furniture Trayton Møbler 4.0 12.0 186 2000-2000 # Ulveco China Toroidal transformers Ulveco 1.5 8.0 48 2004- Unicon-Dalian Ready-mix concrete Unicon Beton 3.3 3.1 25.0 50 1995-1999 Wenzhou Primotex Production of buttons Moria Industri 8.5 6.9 6.9 22.2 60 2001- # Wolfking Tianjin Co. Machinery and equipment Wolfking Danmark 2.0 0.5 9.0 35 1997-2000 Yan-Dan Consultancy Dangroup International 0.8 4 1995-1999 Zhejiang ACO PVC windows Plastmo 1.1 0.9 9.0 60 1996-2002 # Zi Dan Publishing and printing Heidelberg 8.8 8.7 8.7 177.0 486 1996- Total 63 projects 560.4 188.2 540.6 231.7 4,844.2 12,827

India Akay Flavours Chemical industry Chr. Hansen 16.7 11.1 44.2 80 1996-2004 Arcodan Communication equipment Arcodan 2.4 10.0 65 1994-1998 * Asian Can Fabricated metal products Rexam Holding 3.0 17.0 175 1989-1990 * Asian Closures Fabricated metal products Rexam Holding 2.3 13.0 50 1989-1990 CG Maersk Data EDP software Mærsk Data 4.2 4.0 16.2 450 1996- Coduras Exports Food and beverages Atlas-Stord 5.7 3.1 3.1 30.0 150 1993- * Convoy India Designing of ships Logimatic Software 0.5 0.5 0.5 3.1 6 1999- * CRIIL EDP software Computer Resources Int. 5.0 4.0 4.0 14.0 60 1991- * D&H Secheron Migatronic Production of welding equip. Migatronic 1.4 8.0 31 2000-2002 * Dane Foods Butter cookies KelsenBisca 0.2 0.3 5 1995-2000 * Dania Food Food additives Palsgaard Industri 2.5 2.5 9.0 40 1991-2000 Danish Steel Cluster Production of steel items Danish Steel Cluster 3.4 2.0 2.7 2.7 9.8 30 2004- DENIN Foods Extruded snack pellets Dan Extruder 3.6 18.9 50 2000-2001 * Egmont Imagination India Publication of comic books Egmont 3.8 3.8 15.6 35 2001- Energy Solutions Int. IT solutions Energy Solutions International 1.6 1.6 4.3 30 1998-2004 Engsko Kristone Mill stones Engsko 0.4 0.4 1.2 40 1995-2003 Fibcom Electrical machinery/equipment Tellabs Denmark 6.2 17.7 20.4 12.3 50.4 74 1994- FLS Automation India Production of control systems F.L.Smidth 1.6 0.4 0.4 10.0 24 2003- Fowler Westrup (India) Machinery and equipment Westrup 3.1 2.6 5.3 3.7 17.4 85 1999- Fuller India Design/equip. f/cement plants Fuller 4.4 14.0 225 2000-2003 * Garware-Utzon Textiles N.P. Utzon Holding 1.5 6.0 20 1995-1998 * Global Wool Alliance Textiles EAC 19.7 58.9 79.5 58.3 99.3 360 1994- Group 4 Cash Security systems Group 4 Falck 5.6 2.8 2.8 12.5 1,000 2004- Group 4 Falck India Security Systems Group 4 Falck 4.2 4.2 4.2 7.8 25 2004- Group 4 Guarding Security systems Group 4 Falck 4.2 60.0 4,000 2004- Grundfos Pumps India Assembly/production of pumps Grundfos 2.1 2.2 40.5 30 1998-2002 Gujarat Ambuja Cements Cement FLS Industries 8.8 6.9 6.9 843.0 300 1994- Gujarat Sidhee Cement Cement FLS Industries 13.2 13.0 175.0 400 1994-2003 Indan Energy Pvt Windfarm San 0.7 0.9 1.3 1.3 4.4 2 2002- Indo-Dan Lampshades Furniture Erik Frederiksen Production 0.7 0.7 4.3 85 1997-2003 IndoDane Textiles Textiles Vestergaard Frandsen Group 0.9 0.6 7.0 94 1994-2003 Infrastr & Tech Consult. Consultancy and management Kampsax 0.2 0.2 6.8 80 2001-2004 IRON Maxflow Machinery and equipment Maskinfabriken Iron 4.6 3.3 15.2 60 1995-2001 Kampsax India Mapping Cowi 2.2 9.7 11.7 8.8 27.5 20 1994- KE Burgmann India Production of expansion joints KE-Burgmann 3.4 3.0 3.0 5.2 33 2002- L&T-Ramboll Consultancy Rambøll 2.0 1.3 6.5 25 1997- LEC India Software EDP software Lec 1.9 1.7 9.0 50 1994-2000 LICindia Engineering Energy Solutions International 0.6 0.0 1.8 20 1995-1998 * LK India Electrical equipment LK 1.9 6.7 1.8 1.8 19.6 200 1998- LM Glasfiber Non-metallic mineral products LM Glasfiber 12.0 7.4 31.0 130 1993-2002 Marinplast Boat yard PF Marin Plast 0.5 0.9 5.0 40 1984-1988 * Mather Derby Machinery and equipment Maskinfabrikken Derby 13.9 135.0 180 1991-1993 * MD-JK India Textiles Julius Koch International 0.4 2.5 40 1994-1998 * NEG Micon India Manufacture of wind turbines Vestas 111.4 111.4 111.4 300.0 100 2003- ORG Informatics Office machinery/computers Dansk Data Elektronik 2.6 2.6 2.6 24.6 565 1993- IFU Annual Report 54 aid ihn .Luizn6703031806 99 * 1989- 1992-1993 * 1984-1987 * 1990-1999 67 100 10 1 118.0 94.9 11.0 * 1992-2004 1.0 0.3 * 1996-1998 101 1994- 0.3 25 19.7 1996-1998 101 14.2 2001-2003 35 1994-2003 46.0 1996- 1996-2003 400 300 5.9 1996- * 1992-1999 6.7 300 300 9.3 9.6 9.8 1993- 1996-2002 74.0 14 75 11.5 780.0 57.0 600 123 10.9 1.8 4.4 0.0 3.0 4.2 1999- 51.6 1,087.0 22.2 2.6 J.Lauritzen 1998- 9.2 1992- 50 51.6 1996-2004 4.4 2.3 1.6 9.9 30 GEANiro J.Lauritzen/Globe 275 12.3 5.8 MaskinfabrikkenDerby 75 2.0 2.3 4.7 24.3 17.5 4.7 0.5 Cowi 3.3 15.8 Foodandbeverages 1.8 Computerandrel.activities 4.1 Fishing AalborgIndustries 50.5 Coolersandfreezers 0.6 4.0 1.6 0.7 Fabricatedmetalproducts 15.2 Fishing 4.1 0.6 4.0 31.3 0.7 Binadan P.T. Wahana Derby 0.9 P.T. OvotecInternational AalborgIndustries 3.0 FLSIndustries 3.3 QualityPellets Dankaffe Tellabs Denmark Danindo Cowi ProCon Solution Unomedical Chemicalindustry Borncharter 1.9 Production ofsoftware FLSIndustries 4.2 Medical/precisioninstruments Indonesia York Refrigeration Foodandbeverages Foodprocessing RoulundsRubber 4.5 0.6 Total 59projects Machineryandequipment 3.9 Venkateshwara Hatcheries Cement TTK MærskMedical EDPsoftware Brakepads&linings Tellabs Software RoulundsRubber Taparia Exports RoulundsRubber Sividan Productionofrubberhoses Wincon Cement West Wind Saurashtra Cement Rubberandplasticproducts Pedershaab Sabroe India Manufactureofwindturbines Roulunds Friction Roulunds CodanHoses Machineryandequipment Roulunds CodanBelts Procon Prism Cement Pioneer Wincon Pedershaab Millars hraBeeyBeeyDnrw81501. . 20101988- 1989- 100 5 52.0 11.7 1974-1982 1992-1999 0.1 2002- 1999-2001 100 25 15.1 * 1996-1997 15 2.0 100 1995- 4.8 1988-1991 5.0 0.2 10 9.5 84.0 1990- 80 90 8.1 3.0 6 126.3 57.0 1992-2000 0.3 1.0 2.9 2.4 16.0 * 1985-1987 24.6 104 # InternationalWater Contractor 0.3 1993- 1989-1994 36.3 2.5 2000- 1988-1993 Danbrew 0.5 15 24.7 89.0 1988-1990 5 * 1991-1999 6.6 80 20.3 104 1995-2000 308 1986-1996 5.0 30 * 1988-2002 0.1 4 Water supply 4.0 1990-1997 * 245.9 8.0 1991-1998 20.0 100.0 52 * 40 * 1990-1991 1991- 3.0 1 42 AirServiceInternational 22 1.0 98.3 0.5 19.5 Brewery 5.3 HOHWater Technology 12.0 0.9 1 2002- 3 6.4 * SeaplaneHolding 13.0 7.0 13.0 101.1 1993- HOH Water Technology 1993-1997 Total 0.9 2projects 133 0.1 1.0 15.4 SkagenFishNetwork Sika 1.8 49.6 1.6 Nedrill DKKemiInternational 120 Ghorka Brewery Airtransport 540.0 1 0.3 Water supply Nepal 22.2 20.6 1992-1996 66.8 1991-2002 0.3 128.7 Tourist Resort 1.1 AalborgPortland Skaarup&Jespersen 1.9 1991-2000 Total 4projects 129.0 Bottledwater 0.5 1.7 2.6 Male Water &Sewerage 15.5 2000- 6.3 Chemicalindustry 13 23 Maldivian AirTaxi 25.3 1.1 4 RockwoolInternational 2.6 1.4 129.0 1980-1994 Furniture 0.6 Island BeveragesMaldives 1970-1977 Fishing 0.4 1.3 IPOH Investments Aalborg Portland 205 3.6 4.0 4.5 26.8 Maldives 0.3 1.0 110 1.5 GEANiro 400 Drymortars 2002- ScandinavianAvionics 563.2 Architects Total Marketingofdrymortars 31projects 2.1 4.9 0.0 1.5 Medical/precisioninstruments 2.7 CodanGummi 86.0 Unico Kemi 20.0 AalborgPortland 3.0 GEANiro Mineralwool 143 KvikKøkkenet KunststofKemi STAR Fishieries 129.0 56.3 Skim CoatIndustries Food andbeverages Trading ofconstr. 28.4 material Skaarup&Jespersen 0.3 250.0 CodanGummi Sika 56.3 0.4 1.6 DanskDataElektronik SCI Marketing EAC(Malaysia) Rubberandplasticproducts 0.4 Cerekem Chemicalindustry Scanavionics Medicotest 83.3 Wood products 50.0 Scan Dairy&Food OleT. Kragh/PerKragh Marketing DZHolding Granitetiles Medical/precisioninstruments 15.4 Roxul Asia 1.8 Krüger Agricultureandfarming Fibertex RCI Marketing 83.3 DanskDataElektronik 0.1 Pong CodanRubber 3.3 Sewageandrefusedisposal 25.6 GEANiro Poultryprocessing Pong CodanMarketing EDPsoftware 1.2 Pl. Masterbach 0.4 1.8 Informationtechnology Oriental Horticulture 0.4 2.1 Plasticcards Niro Ceramic 0.6 Medicotest Foodandbeverages Fishing Textile fibres Kvik Dan Software 87.4 Kualiti Alam SeniorFlexonicsBredan ArlaFoodsInternational Systema&Checker CimbriaUnigrain Guthrie-DDE Computerandrel.activities Kemira Goldkist Fabricatedmetalproducts Fibertex Nonwovens Machineryandequipment Machineryandequipment DZ Security DDE AalborgPortland Dyrup&Co. Dankaffe AalborgPortland Daneel Productionofwhitecement Limestonequarryoperation Dan Software Cimbria FarEast Dairy Fertilizers Checkerasia Bredan Aalborg WhiteAsia Aalborg Resources Paints Malaysia Total 2projects Kemapco DJDC Jordan Total 1project Dyrup Iran Total 6projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product 6. 4. 2. 9. ,5. 12,166 4,256.7 290.4 427.5 249.9 267.5 7. 1841636815591,527 1,525.9 336.8 401.6 81.8 375.4 04501. . 37105 63.7 0.1 220 224.6 15.2 5.0 16.0 63.8 10.4 47.5 20.0 380 290.6 9.6 20.9 7.0 39.2 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm . 567. 63692315 400 649.2 20.0 56.3 71.7 75.6 1.8 5.4 1.2 0.6 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation . 720- # 2002- # 2002- 27 3 # 6.0 2002- 3.0 1989-1990 11 10 9.0 1.0 # 2002- 22 6.6 iaihAia edCrkm29584. 5 1980-1982 1979-1992 1974-1987 150 1,060 210 49.0 25.0 1975-1982 8.0 1975-1981 1972-1987 10 500 25 6.0 6.0 1981-1996 1976-1988 5.0 4.0 6.6 1984- * 300 1981-1988 25 9.7 5.8 6.1 260 750.0 * 1985-1987 10 16.0 * 1996-2001 0.3 4.1 1.1 425.0 2.9 90 0.5 17.0 0.3 208 1979-1989 1.3 0.8 * 1997-2001 54.0 11.4 0.3 225 23.9 5.7 250 3.4 0.3 1993-2002 1994- 11.8 66.0 0.3 Unidex Cerekem 1,000.0 M.Krüger 4.5 3.4 124 390 1993- 1978-2003 * 1987-1988 * 1995-2001 European Sterling 3.6 15.0 1,125.0 4.5 400 23.8 2.3 1997- 1,550 RoulundsRubber 140 500 Philcadan 12.6 33.0 970.0 2.4 Animalfeed 1,600.0 4.6 3.1 30 Clothing 45.0 Furniture # 1,360.0 33.0 Brdr. Hartmann/EAC 2000- * 1982-2002 32.3 transport Air 3.2 FLSIndustries 1.5 Frictionmaterials 24.5 DZHolding 4.5 4.5 Pulpandpaperproducts FLSIndustries 1 32.3 B.Christensen Maskinfabrik 50 Kampsax/Krüger Furniture 61.0 1.4 2.9 29.8 Vitarich 7.0 10.0 32.9 Unidex 35.1 Foodandbeverages Plasticcards 2.9 Towi AlkalineBatteries Summit Cement Rotex 4.5 3.9 APVEngineering Construction 42.9 Philmop Cement 68.7 Philcadan AalborgPortland FLSIndustries JEDE Asianbakers 27.1 FLSIndustries 6.1 HaldorTopsøe DZ-Philippines Wholesale ofwhitecement 1.6 Drilling Corp.ofAsia 3.8 3.8 Davao Union Batteries FLSIndustries Atlas/Hi Cement KelsenBisca 3.8 Aalborg White(Philipp.) HaldorTopsøe Philippines FLSIndustries Dairy Total Cement 1project DanskTransfertryk Fertilizers 1.7 APVEngineering Cement 1.7 Pacific Battery Papua NewGuinea Cement Total 12projects Cookies Fertilizers Foodandbeverages Pepcem Cement APVEngineering Cement Milkpak Maple Leaf F.L.Smidth Textiles Fauji II Fauji FertilizerCo. Agricultureandfarming Fauji Cement Rehab.ofcementplant Dane Foods Dairyland Chemi DanskCo. Chakwal Cattle Breeders Camden Holding Pakistan oa cniai eer oa cniai . . 103 1998-2004 30 1980-1987 1997- 1993- 410 11.0 1991-1994 1985-1994 1997-2003 30 # 15 8.0 2003- 410 30 25 51.0 8.0 1985-1993 100 13.0 11.0 3.4 124 1999- 3.6 3.0 4.0 1992-2002 1992-2002 18.0 50 4.7 3.4 3.0 2002- 2002- 600 2004- * 1985-1987 1.0 600 * 1995-1997 1.6 27.0 3.8 2004- 3.6 2.8 2.2 116 863.0 450 1.0 480 750.0 20 1.0 36 2004- 13 3.6 3.3 30.0 13.7 49.7 2.0 1.4 9.3 6.6 1987-2004* 1.0 2.0 7.2 1.0 130 1.7 18.3 1.8 90 20.0 6.2 1.4 0.3 13.2 RoyalScandinavia 8.0 19.7 19.7 17.9 MejerigaardenHolding/Globe 1997- DanskTransfertryk 20.0 * 2001-2003 0.3 10.0 13.2 1.6 CodanGummi 0.5 3.5 340 20.0 50 0.3 Brødrene GramInvest 1.6 CodanGummi CodanGummi 29.3 3.5 RoyalScandinavia * 1988-1988 19.7 3.1 Fabricated metalproducts Jewelry Rubberproducts 19.7 0.3 1997- * 1973-1974 # Textiles 16.6 1.4 12 Dairy 2.0 1998- 2.9 DZHolding 60 300 Porcelain Painting Rubberprofiles Rubberhoses Royal Scandinavia 7.0 3,120 1.5 5.0 0.5 Egmont 1.9 Quick-Cool Co. 20.0 0.7 Int. Carlsberg 372.0 1985-1988 Int. Carlsberg GPVInternational 154.1 Premier DairyFood GeorgJensen Pongpara 1985-2001 5.0 0.8 Penadansk Plasticcards 2 10.0 FluxTransformerteknik Patra Porcelain FluxTransformerteknik 21.0 Serviceof metalparts Prod. ofelectroniccomponents Electrical machinery/equipment P. 108 C.Rubber Publishing house Caretex Production ofjewellery SkandinaviskKokosvæveri Sprout-Matador P. C.Hose 10.0 2.0 Productionofcontainerliners 10.0 21.0 Nation EgmontEdutainment 107.9 1.3 Orbital GPV Asia(Thailand)Co. Brewery Brewery Georg JensenThailand ProductionofControlsystems 7.8 Flux International Flux B.Grimm Energy MaintenanceServ. DZ 13.2 9.9 Textiles Carlsberg Brewery ErikLøgstrup Energy 4.6 C.W.Mackie & Co. Caretex 32.9 C.W.Mackie 1.3 &Co. Beer Thai 1.5 Fabricatedmetalproducts Thailand C.W.Mackie &Co. C.W.Mackie C.W.Mackie &Co. &Co. 1.8 20.5 BüngerEngineering Total 12projects Aarhus United Dessicated coconuts Larsen&Nielsen/EAC Rubberproducts BWSC Skanko Lanka Manufactureoffootwear Machineryandequipment Productionofsquashes 33.4 Silver Power 7.1 Serendib CoconutProducts Rubberproducts BWSC Trade anddistribution Scan ProductsHoldingCo. Serviceofpowerplants Energyproduction/distribution ArlaFoodsInternational Korea CeylonFootwear Novenco Elsteel FlemstofteMadsAmby Ceytra Limited Construction Ceymac RubberCo. C.W.Mackie &Co. Bünger BWSC Lanka Asia Power Ventilation Animalfeed Sri Lanka Dairy Total 1project I.B.S. Singapore Total 3projects Novenco Kodas KDDC Republic ofKorea Total 13projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product 2. . 7. 2183753,960 8,367.5 72.1 176.0 7.0 223.6 441. 743. 1. 6,589 710.8 33.9 37.4 16.3 24.4 122 124.9 2,765 1,318.1 37.5 22.3 42.0 66.7 34.3 51.0 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm . 4090 54.0 4.5 . . 00300 20.0 1.3 1.3 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation ,4. 0 1990-2003 300 2,145.0 425019- * 1998- 1998- 1998- 530 65 * 1998- 14.2 1,858 13.5 72.0 321 33.0 . 1992-2000 # 5 2002- 0.1 2 0.6 . 1 1998- * 1982-1987 115 6.6 20 1.0

IFU Annual Report 55 IFU Annual Report 56 usFe ilEisB us020502102 1976-1978 20 1.0 2004- 2002- 150 20 1992- 1992-1994 6.1 0.8 0.2 120 120 2002- 2003- 0.5 1.3 91.0 40.0 25 0.2 * 2001-2002 52 1994- 1.3 1975-1981 0.2 7.1 0.2 0.0 340 192 22.0 2003- 2003- 90 1.4 20.8 130.0 4.1 3,300 # 12 31.6 1996-2003 6.7 2001- 13.0 78.8 EliasB.Muus 4.1 7.4 50 140 6.7 0.2 39.0 24.0 3.0 6.1 19.4 7.4 2004- 35.8 2.6 39.0 1.0 3.7 22 7.7 1.0 Feedmill 25.1 1.6 Watertech Topas 0.5 3.0 7.7 26.3 CarlsbergInt. 15.7 1.0 249projects Total ASIA 6.4 0.4 6.1 M.Krüger 1.0 FabriciusRederi Tuborg International Total ScanComInternational 1project 0.9 GISservices Tourist lodge Orana Muus 1.7 2.1 1.0 Yemen Productionoffurniture Total 11projects Brewery Wood products Productionoffruitjuice Shippingcompany 1.0 Watertech Vietnam Kartoffelmelcentralen M.Krüger Topas Bodilsen EcoLodge Sea SaigonShippingCo. Brewery CarlsbergInt. Scancom Vietnam Cultivationofrootfruits Tropic Sale&market.ofbeer/softdrink DaneTrading S.E. AsiaBrewery Wood gardenfurniture Orana Vietnam MK-Rubico KMC Tapioca StarchCo. Ceramicsandfurniture Int. BeverageDistrib. Furniture Hue Brewery Bodilsen Vietnam Tricon Holding Vietnam Prod.ofelectroniccomponents Total 21projects Tropic Dane Tricon ThaiAutomation Scanthai il eoCeia nutyHdoa amr . . . 602 1989-2002 1991-2004 25 * 15 1993-1999 1976-1987 16.0 2004- 70 4.0 20 1993-1999 12 1992-1998 10.0 32.0 3 * 1986-2000 1.4 4.2 20 15 5.0 1994-2000 1.0 1.9 60.0 0.6 5.0 81 2.4 1.2 0.5 0.6 2.9 87.5 3.4 0.7 0.6 0.6 1.3 2001- 13.7 HydrogasDanmark 0.6 1.8 0 0.8 9.3 16.2 SvendBrorsen 1.0 89.4 Chemicalindustry 0.6 4.2 Paul Bergsøe/EAC 18.0 0.9 Fabricated metalproducts CheckPoint 6.0 Norfo One-Stop-Tour-Operator forLA Total 3projects 1990-1992 Hielo Seco Mining J.Lauritzen 1994-1995 Check PointLatinAmerica 40 Vestas Bera deBolivia Bolivia Westconsult Energyproduction/distribution 8 Kommunekemi 1994-2001 63.0 16.0 Total 1project Machinery andequipment Harbourterminal Sewageandrefusedisposal Belize Minerals Fishing 2.0 750 Belize Total 5projects 466.0 1975-1989 PECORSA Palle Westerby 9.6 Euroamérica 50 Dan Austral A.P. Møller-Mærsk Ailinco Argentina 69.0 Transport relatedprojects 8.6 Total 1project Mærsk Centr. AmericaFac. *Central America(Regional) 12.5 LATIN AMERICA 7.9 0.3 10.4 Total EUROPE16projects 5.4 Tryg-Baltica Total 15projects Korn- og APVEngineering 2.5 Agricultureandfarming DLF-T Insurance Foodandbeverages Agricultureandfarming DanskFolkeferie Hotelsandrestaurants Entas Ege-Baltica DLF-Trifolium Aytac Turkey Total 1project Mellieha Malta EUROPE alrCohn iel . . 609 9919 * 1989-1993 1990-2003 1993-1996 1969-1986 90 3 1999- 30 200 26.0 20 17.7 2.0 125.0 5.0 2004- 1992-2001 6.0 2002- 0.8 250 1973-1985 1.9 24.0 0.3 208 1 8.8 200.0 0.8 250 1988- 15.5 26.3 40.0 34.1 28.6 2,700 15.6 1,730.8 28.6 1.9 0.3 1.6 1.4 54.5 28.2 4.1 1.6 1.6 54.5 Papyrus Minelli 17.4 S&QTech ScanBrid Pulpandpaperproducts Riegens 14.5 4.4 Agricultureandfarming 19.7 1.6 Technical Productionoflightfittings services SASHotels MaskinfabrikkenDerby Clothing Viking Hotelwithrestaurant DKTurkish SASHotels Inv. SASHotels ScanBrid Coolersandfreezers KFK S &QMart Hotelmanagementservices Hotelmanagementservices Riegens Radisson SASOrtaköy Hotelsandrestaurants Radisson SASMackaHotel Agricultureandfarming Parlar Macka ÓtelcilikA.S. Köytür IntegratedPoultry Klimasan Golden Dolphin ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product Foderstof Kompagniet/Globe ,3. 0. ,6. ,2. 742651,235 27,402.6 1,221.7 2,164.6 907.6 1,837.2 1. 681018. ,4. 4,998 3,047.9 4,948 85.6 2,978.9 150.1 85.6 76.8 142.2 71.4 112.3 109.8 154. 1. 904794.471 427.9 59.0 111.6 47.0 91.5 3,811 1,889.4 57.7 126.7 67.5 72.3 163. 54175189 167.5 35.4 32.5 11.6 721505200201984-2002 230 250.0 0.5 1.5 27.2 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm . . . . 20 1.0 0.2 0.5 0.2 . . . . 9457 49.4 15 0.6 4.0 6.0 3.3 1.0 3.4 0.5 0.6 50 69.0 7.9 5.4 2.5 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation 308. 0 89.4 63.0 80182002- 168 38.0 u mrcn erg ergrto qimn ared rsl1. 905 1997-1999 50 1970-1976 * 1984-1992 1981-2004 * 1979-1987 39.0 2004- 50 2 1994-2001 1973-1981 650 10 60 16.0 1970-1986 5.0 151 50 83.0 15.8 31.5 400 62.5 1986-1993 7.0 1989-1996 57.0 1995- 9.2 30 4 1983-1983 1.2 2000- 1975-1984 1996-1998 11.6 0.9 500 9.2 46.5 2003- 30.0 1997- 2.0 25 0.4 5 9.0 8.8 200 * 70 1993-1996 344.4 27.6 31 9.1 100 2.2 1972-1983 2001- 2.0 17.7 55.0 12 17.0 9.4 19.3 0.4 34.0 85.0 6.2 11.3 1988-1997 1.5 50 83 4.9 1.8 2001- 3.7 34.0 8.9 1992- 2.0 6.9 65 SabroedoBrasil 2.0 1990- 10.0 8.4 2.6 0.8 24 11.4 245 1.1 York Refrigeration SabroedoBrasil DalhoffLarsen&Hornemann ScanComInternational 8.9 13.8 35.5 SabroedoBrasil 1978-1984 350 Refrigerationequipment 2.6 Drying/processingofhardwood 2003- 0.5 0.3 21.5 0.0 SabroedoBrasil Hempel SabroedoBrasil 3.2 NovoNordisk Refrigerationequipment Refrigeration equipment Brdr. Hartmann/EAC 17.5 13.3 5.1 138.0 Refrigerationequipment 39.4 80 F.S. Andersen 1991-2003 10 2.7 0.0 Sul AmericanaRefrig. 3.3 Refrigerationequipment 7.2 Refrigeration equipment 3.2 1.9 1.2 8.2 ScanCom doBrasil Wood products Kongskilde Pulpandpaperproducts Machineryandequipment 10.6 30.7 15.0 130 5.4 Sabroe/York doBrasil 3.5 0.7 Chemicalindustry DaniscoIngredients Sabroe Montagens 8.0 0.2 Machineryandequipment 2.3 1.2 Sabroe MarineService 3.0 25.0 19.7 Brdr. Hartmann Sabroe Export Paints Sabroe doBahia 3.6 Nordisk Timber 1.2 8.6 2.9 Foodandbeverages Gerstenberg Pulpandpaperproducts FLSIndustries 5.1 Glunz&JensenInternational Nordisk doBrasil Hartmann-MapoldoBrasil Multiwing J.Lauritzen DanishDesignGroup 11.3 Mapol Machineryandequipment Electricalmachinery/equip. 10.8 Kongskilde 8.5 Euro-Matic Pulpandpaperproducts Hempel Tintas 9.2 1.7 DalhoffLarsen&Hornemann C.C.BrunEntreprise Cementmachines Hartmann-Mapol ColdStoreforFruits Hartm.-Mapol MontesClaro Prod.ofplasticproducts 1.9 Grindsted 2.7 Refrigerationequipment 11.3 PerBarkeNevermann Glunz &Jensen DanicaLatinAmerica WWF Cowi Gerstenberg Danfoss Furniture Productionofcoldstorepanels Frio GrandedoNorte Chr. Hansen Machineryandequipment 5.8 FLS Comercio Technical ServiceProvider Machineryandequipment Euro MaticBrazil Forestry Design 2000doBrasil Agriculture and farming Danica Termoindustrial AalborgVærft Danica Nordeste Naturepark Danfrio AalborgIndustries Fabricatedmetalproducts Danfoss doBrasil Cáceres Florestal Sera-Scandia ProductionofSerumandPlasma Fabricatedmetalproducts Caribersa Capricórnio Florestal Biotropical Bio NutrientesdoBrasil Aalborg Pontin Aalborg Industries Brazil uare giutr n amn eee . 071. 501 9719 * 1987-1995 1980-1981* 15 1997-2002 5 35.0 700 1996-1998 1.0 855.0 1971-1978* 46 110 13.2 1980-1986 18.0 1999-2001* 1979-1998 21.0 20 33.9 10.7 25 70 2000-2001* 29.8 26.7 2.4 1987-1992* 16.0 80.0 0.0 25 25 4.1 2003- 22.4 3.3 2003- 0.1 11.2 17 1.9 1995-1999 21.7 100 Cerekem 73.2 9.3 1994-1999 200 2.7 17.3 FLSIndustries 79.3 1997-1999* Agriculture and farming 55.3 66.0 50 Scan-Form 0.6 5.1 20 25.0 17.1 1999-2004 13.9 1983-1995 DeSmithske 2.3 0.6 25.0 Total 1project 1.3 6 HolstedTørrestation Cement Emidan 230 RustfriStaalmontage Guyabreed 1992-1997 30.0 0.6 Construction 5.8 Guyana 1,000.0 4.8 24.5 Agricultureandfarming 1996-1999* 25 Total 1project Oilpitcleaning 1.6 Cementos Progreso Chemical industry Guatemala 40 2000- 2.9 DinaCuba Total 4projects 4.2 Dairy Scanform 20 4.5 6.1 13.9 PECS-DESMI 1.2 DinaCuba 10.8 BiludanGruppen Ecudina 20.5 Dan Química 18.2 Sera-Scandia Krüger Production ofPlasmaandSerum Ecuador 9.4 1.9 Feedmill Total 2projects 10.4 CarRentalinCuba 6.7 Breedingofpigs Sera ScandiaDomicana Indulac 1.8 Dominican Rep. 17.4 EAC Total 3projects J.Lauritzen SabroedoBrasil Fishing FLSIndustries 11.2 Rex CarRental DinaFeed J.Lauritzen(Chile) Machineryandequipment DinaCarne Meatprocessing Cuba 6.2 Cementproduction 0.7 J.Lauritzen(Chile) Total 4projects Sabroe deColombia Sabroe doBrasil Trucking Plumrose Madrileña Controlledatmosphere Coldin Cementos Rioclaro Vendsyssel Denmark Trucking Refrigerationequipment Colombia J.Lauritzen Unitsf/controlled atmosphere Total 6projects Segetrans Transporte Foodandbeverages Segetrans Sabroe deChile Copenhagen Smokehouse CAC C.A. Holding Chile Total 33projects ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product 3. 2. 4. 3411793,571 1,157.9 73.4 243.9 122.3 139.2 237. 48109141 120.9 94.8 75.9 22.3 475 1,079.5 19.8 19.4 18.1 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm . 071. 5015 35.0 700 855.0 18.0 10.7 33.9 127 2.4 29.8 30.3 0.0 0.6 150 4.6 117.7 2.5 25.0 25.0 2.7 30.0 143 6.0 73.7 6.7 30.1 26.7 6.9 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation 003 1987-1994 30 10.0 . 11992-1997 1991-1993 1985-1997 1990-1993 71 25 1 7 1.0 1.0 0.1 1.0 . 2001-2003# 2 7.4

IFU Annual Report 57 IFU Annual Report 58 rlcDiyNr eMxc . . 111. 31995-2001 1992-2002 73 1998- 1996-2004 1991-1999 1988-1991 300 1993-2004 19.4 300 * 1982-1984 1994-1999 11 20 239.0 270 * 1984-1988 70 1993-2004 141.5 650 2001- 108 6.0 95.0 2.0 1981-2002 15 70 42.9 1996-2004 240.0 12.4 27.9 100 11.1 181 5.0 25.0 1994-1999 800 50.2 80.0 25.4 27.0 6.1 107 575.0 67.9 24.1 2002- 9.6 1.1 1.4 14.8 19.5 1.3 4.9 39.2 16.1 81 23.4 12.7 1.0 1.3 1.7 5.8 30.0 3.7 * 1970-1978 24.4 52.5 7.8 10.3 NirodeMexico 3.1 10.3 50 49.9 6.5 22.5 AarhusUnited 2.5 1.8 5.0 12.5 NirodeMexico Rosti 6.1 5.5 PalsgaardIndustri SabroedoBrasil NirodeMexico Vegetable oilrefinery 9.9 GEANiro 13.2 Dairy CodanGummi Refrigerationequipment Atlas-DK NirodeMexico Fabricationandsaleofrubber NovoNordisk Plasticproducts Foodingredients 2.5 Total 16projects B.CInventar Fishing/fishprocessing Santa Lucía NirodeMexico Danfoss Dairy Sabroe deMexico 2.5 Dairy Roulunds Mexico Chemicalindustry Dairy Rosti deMexico Prolac Feedlot Pescado Chiapas 0.2 T.C. Electronic Palmex Furniture Nordisk deMexico Compressors Monica's Food H.Hansen&P. Pedersen Lacpur Dairy Productionofspeakers La Campiña Goodman LoudspeakersMex. Danfoss deMexico Hotelsandrestaurants Carpur Biblomodel Alta Tecnologia Mexico Total 1project Golf Beach Jamaica ivnPouto fHmgoi eaSada332. 12004- 15,245 1998- 81 1991-1996 7,464.6 1996- 42 10 20.5 195.1 3,000 1980-1994 39.2 971.8 143.3 20.0 105 905.1 * 1998-2000 84.0 * 1999-2003 328.0 80 1982- * 2000-2002 17.1 41.3 4 193.0 4.5 1.200 2000- 5 3.3 40.1 1999- 280.0 1.9 20 5.0 6.6 1990-1996 1985-1988 31.6 projects asperendof 2004.Disbursementsinforeigncurrencies arestatedattheexchange 500 10.6 antees. Total disbursementsarethetotalsuminDKKofsharecapitaland loansdisbursedto 5.8 15.5 5.7 91 investments insharesincludeoverruncommitments, andinvestmentinloansincludesguar- 1991- 266.3 50 29.4 ipation cannotberelatedtothefiguresin balancesheetatyear-end. Figuresforcontracted PlumroseLatinoamericana ects whereIFU’s participationhasbeenterminated. Consequently, thefiguresforIFU’s partic- 70.0 300 6.6 2.0 exchange rateprevailingatthetimeofsigning. Thelistincludesactiveprojectsaswellproj- 1.0 6.4 26.2 0.3 ect companiessinceprojectstart.Investments governedinforeigncurrencyarestatedatthe 38.9 # DeSmithske 1996-1998 86.5 IFU participationistheaccumulatedsum inDKKofIFU’s contractedinvestmentsinallproj- Sera-Scandia 2.7 8.6 14.9 0.3 3 Pigbreeding 1994-1999 ProductionofHemoglobin 1994-1999 1997-2000 EAC J.Lauritzen GRAND TOTAL 528PROJECTS 17.5 Lactosan RexamHolding 2.2 8.6 2001- 11.7 Total LatinAmerica104projects Oilpitcleaning 25 1998- 25 250 6.8 Processedmeatproducts 24.1 Fabricated metalproducts Total 5projects 0.5 50 0.2 J.Lauritzen A.P. Møller-Mærsk Plumrose Latinoamericana 202.0 5 110.7 0.0 85.7 22.3 CosmosTrawl/Randers Fishprocessing Reb Cheesepowder PECS-DESMI-CPVEN Haustrup Venezolana 423.6 12.0 Bioven Fishing/fishprocessing 0.6 2.1 AFI Productionoftrawls Venezuela 24.6 0.9 Portterminal 0.1 J.Lauritzen Total 5projects 38.2 0.4 Atlas-Stord 24.6 AlfaLaval Oceanica SabroedoBrasil 1.7 Mvd Int.ContainerTerm. Int. Carlsberg 39.5 Gley Procurementofguarantees Machineryandequipment AHBHolding Trucking offruita.o. 0.4 26.7 Cosmos Trawl Refrigerationequipment 20.7 Astra 26.7 Uruguay 0.4 0.1 Wiik &Co. Asparagusprocessing Total 6projects Segetrans Peru Agricultureandfarming Brewery Sabroe dePeru PAMIAL A.P.Fima Møller-Mærsk Danper Trujillo DeSmithske A.P. Møller-Mærsk Agroindustria Danper A.P. Møller-Mærsk Peru BWSC NoDanishpartner Total 1project ThermicalElectricityPlant Oilexploration Cesusa Oilpitcleaning Paraguay Oilexploration Oilexploration Total 5projects Wind millfarm Pedregal PowerCo. PECS-DESMI Hold. Mærsk Sirius Mærsk Mercury Mærsk Jupiter Panama Total 1project ENISA Nicaragua ciiypoutDns ate()Sae on ibre usadn Investment Outstanding Disbursed Loans Shares DanishPartner(s) Activity/product ,4. ,5. ,6. ,5. 509599,995 55,069.5 1,958.7 4,465.9 2,959.5 2,944.2 282792652. ,9. 3,156 1,594.9 27.2 246.5 217.9 62.8 214. 502773,233 287.7 65.0 1.894 504.9 49.2 10.6 22.1 34.2 70.4 14.9 91 70.0 11.7 0.2 12.0 KmDK KmDK KmPersons DKKm DKKm DKKm DKKm DKKm . . . . 50 5.0 2.5 2.5 0.2 . 313. 60325880 392.5 26.0 35.4 33.1 353 2.7 828.8 24.6 63.7 115.2 0.1 F atcpto oa oa oa mlyetPeriod Employment Total Total Total IFU Participation Investmentthroughholding company # Operationdiscontinued * The numberofemployeesistheexpected tobeemployedattheappraisalstage. companies inDKKasoriginallyforeseenat thelatestappraisalstage. and 8intheannualaccountsfor2004.Total investmentisthetotal inallproject Outstanding amountsarestatedinDKKat costandcanbereconciledtothefiguresinnotes7 than thestated,contractedinvestment amount duetofluctuationsintheexchangerate. rate prevailingatthetimeofdisbursement, anddisbursementfigurescanthereforebelarger . . . . 5 0.6 0.4 0.4 0.4 00601987-1991 600 10.0 . 9719 # 1997-1998 5 0.7 1995-1997 5 1.3 Danish International Investment Funds

Danish International Investment Funds is the umbrella term for IFU, IØ and IFV. Each of the Funds operates within a specific geographical sphere:

G IFU in developing countries with a per capita income below the World Bank’s upper limit for new loans (USD 5,295 in the year 2005) G IØ in Central and Eastern Europe and in the Asian part of the former Soviet Union G IFV in developing countries with a per capita income 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 12 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 Invest- ment Bank (EIB). EDFI website: www.edfi.be

I HEAD OFFICE Copenhagen N OFFICES Beijing · Johannesburg · Moscow · New Delhi L ADVISER OFFICES Cape Town · Lomé · São Paulo · Warsaw G ADVISERS Ankara · Bangkok · Beijing · Bucharest · Budapest · Buenos Aires · Cairo · Chennai · Copenhagen · Costa Rica · Hanoi · Johannesburg · Kaliningrad · Kiev · Kuala Lumpur · Lahore · London · L’viv · Mexico City · Moscow · Mumbai · Nairobi · New Delhi · Novosibirsk · Plovdiv · Pretoria · Saint Petersburg · Santiago · Singapore · Suzhou · Tallinn · Washington D.C.

G G IG G NG G G L G G GG G G NG G G G G NG G G G G G G L GG G

G L NG G L G

THE INDUSTRIALISATION FUND FOR IFU-BEIJING IFU-CAPE TOWN (ADVISER OFFICE) DEVELOPING COUNTRIES (IFU) Room 1808, China Travel Service Tower 32 Belmont Avenue Bremerholm 4 No. 2, Beisanhuan East Road Oranjezicht 8001 1069 Copenhagen K Beijing 100028 Cape Town Denmark China South Africa tel + 45 3363 7500 tel + 86 10 6466 2479 tel + 27 21 465 5701 fax + 45 3332 2524 fax + 86 10 6460 9799 fax + 27 21 465 5701 e-mail: [email protected] www.ifu.dk e-mail: [email protected] e-mail: [email protected]

IFU-JOHANNESBURG IFU-LOMÉ IFU-NEW DELHI IFU-SÃO PAULO Lancaster Gate, (ADVISER OFFICE) SPWD Building, 2nd floor (ADVISER OFFICE) ground floor KA Consultants 14 A, Vishnu Digambhar Marg Rua Riachuelo 460 Hyde Park Lane, 21, rue du Chemin de Fer (Rouse Avenue Lane) Edificio Trade Tower, Hyde Park 2196 B.P. 7373 Lomé New Delhi – 110002 Office 1105 P.O. Box 41934 Togo India CEP 18035-330 Craighall 2024 tel + 228 221 78 07 Tel + 91 11 2321 7160 Sorocaba-São Paulo Johannesburg fax + 228 221 75 13 Fax + 91 11 2321 7167 Brazil Republic of South Africa e-mail: [email protected] E-mail: [email protected] tel + 55 153 224 1030 tel + 27 11 325 19 40 fax + 55 153 231 4442 fax + 27 11 325 19 44 e-mail: [email protected] e-mail: [email protected] EXECUTIVE BOARD

Sven Riskær Frank Norman Larsen Managing Director Deputy Managing Director

PROJECT DEVELOPMENT DEPARTMENT (PDD)

Torben Huss Ib Albertsen Brian M. Andersen Jens Bayer Kim Gredsted Department Director Senior Investment Officer Investment Officer Senior Investment Officer Investment Officer

Torben Kjær Malene K. Kristensen Martin M. Kristensen Martin Rømer Natalia Svejgaard Senior Investment Officer Investment Officer Senior Investment Officer Investment Officer Investment Officer

INVESTMENT MANAGEMENT DEPARTMENT (IMD)

Morten Christiansen Rena Chen Peer Munkholt Hans-Jørgen Nyegaard Anders Paludan-Müller Department Director Investment Officer Senior Investment Officer Investment Officer Investment Officer

SPECIAL OPERATIONS DEPARTMENT (SOD)

Svend J. Heineke Lisbeth Erlands Max Kruse Department Director Senior Investment Officer Senior Investment Officer

CORPORATE ADMINISTRATION DEPARTMENT (CAD)

ARCHIVES SECRETARIAT LEGAL UNIT ENVIRONMENTAL UNIT IT UNIT IT UNIT

Henrik Jepsen Birgitte Christensen Bjørn Jakobsen Jens Rixen Michael Wedel Sørensen Michael Stig Andersen Søren Heilmann Department Director Chief Archivist Head of Secretariat Senior Legal Adviser Environmental Adviser System Administrator (IT) System Administrator (IT)

FINANCE DEPARTMENT (FIN)

Niels Gravgaard Laursen Alice Brøndum Lone Bjørn Hansen Lars Rose Olsen Department Director Personnel Administrator Chief Accountant Finance Officer IFU OFFICES (Reporting to IMD)

JOHANNESBURG, SOUTH AFRICA BEIJING, CHINA

Deepak Malik Tayengwa Masawi Hong Jiang Zhan Hu Resident Representative Investment Officer Resident Representative Investment Officer

NEW DELHI, INDIA

Deepa Hingorani Sudhir Dravid Kesavan Narayanan Sanjay Chatterji Rajesh Khabar Manmohan Malhotra Resident Representative Investment Officer, Deputy Investment Officer IT-officer Assistant System Administrator IT-officer Resident Representative a.i. (IT)

ADVISER OFFICES (Reporting to IMD)

LOMÉ, TOGO SÃO PAULO, BRAZIL CAPE TOWN, SOUTH AFRICA ADVISERS

Kodjo Aziagbé Per E. L. Olsen Anders Ærøe Senior Regional Adviser Senior Regional Adviser Regional Adviser

Helle Bechgaard Mike Benn Denmark Pretoria, South Africa

Riyaz Bokhari Jes Boye-Møller Uffe Bundgaard-Jørgensen Gareth Campbell Paul Cardwell Larry Yee Cheng Nalan Cumcum Lahore, Pakistan New Delhi, India Denmark (Facilitator) Johannesburg, South Africa Costa Rica Beijing, China Ankara, Turkey

Nguyen Thahn Ha Daniel Hagby Jørgen Dan Jensen Henrik de Jonquières Hemming Jørgensen Faridah Abdul Kadir Peter Kilian Hanoi, Vietnam Nairobi, Kenya Denmark Denmark (Facilitator) Denmark (Facilitator) Kuala Lumpur, Malaysia Mexico City, Mexico

Jens Kronborg Claus E. Madsen Vipin Malik Pradeep Mallick Armando Martinez Farouk Nasser Mikael Olufsen Santiago, Chile Buenos Aires, Argentina New Delhi, India Mumbai, India Mexico City, Mexico Cairo, Egypt Denmark (Facilitator)

Mogens Dan Pedersen Tonny Bech Pedersen Stephen Potter Søren Rahbek Peter Rasmussen Frank Roost José M. Ruisánchez Denmark Denmark London, United Kingdom Denmark Suzhou, China (Facilitator) Nairobi, Kenya Washington D.C., USA

Sridhar Sampath Hans Schiønnemann Bendt Starup Jørn Fredsgaard Sørensen Lucien Wang Poul Weber Chennai (Madras), India Denmark (HRD Adviser) Singapore, (Facilitator) Denmark Beijing, China Bangkok, Thailand (Leave of absence from IFU till 30 June, 2005) Text consultant Rikke Viemose Layout Linda Balle Print Frederiksholms Offset A/S ISSN 0906-3560