CDC Group plc Financial Review 2009 Our mission is to foster growth in sustainable businesses, helping to raise living standards in developing countries.

Our investment policy is to make more than 75% of new investments in low income countries* and to invest more than 50% of our funds in sub-Saharan Africa.

Contents

2 Statement from the Chairman 4 Our Business 12 Statement from the Chief Executive 14 Board of Directors 16 Business Review – Africa 18 Business Review – Asia 20 Performance Review 28 CDC Universe

* Those with an annual gross national income (GNI) per capita of less than US$905. CDC Group plc Financial Review 2009 1 2009 Highlights

£359m New investments in developing countries, 61% in Africa £207m Total return after tax £742m1 Other capital mobilised £162m Portfolio cash generated for re-investment in developing countries £1,411m Portfolio of fund investments £207m New commitments to funds in a difficult period for fundraising £1,561m Outstanding commitments to funds 794 Underlying portfolio companies located in 71 countries CDC’s Investment Code Process externally audited for the first time

1 See page 22 for an explanation of how mobilisation is measured. 2 CDC Group plc Financial Review 2009 Statement from the Chairman Richard Gillingwater CBE

In the deepest recession that we’ve 2009 also saw the first year of had in many decades in developed CDC’s new investment policy, markets, the emerging markets which the organisation has fully in which CDC invests its capital embraced. The new policy, which showed some positive growth and takes us through to the end of a steady return to financial stability 2013, targets 75% of CDC’s new in 2009. investments over a five year rolling basis in low income countries with The poorer countries of Africa and a particular focus on sub-Saharan Asia that are at the heart of CDC’s Africa and South Asia. It is in investment focus rebounded from these countries that a shortage the lows of 2008 much more of investment for promising strongly than developed markets businesses is still a major of the West and have experienced obstacle to economic growth and a year of unexpected resilience. development. In 2009, 59% of While there remain concerns over CDC’s total of £359m invested what are still fragile developing went into low income countries economies, there are grounds with 53% going to sub-Saharan for optimism based on their Africa. Our pioneering commitment fundamental strengths: lower debt this year to Sierra Investment Fund, and higher growth rates than in the first ever private equity fund in the developed economies. These Sierra Leone, provides an example strengths mean that, despite lower of the innovative and imaginative levels of economic activity last ways in which we are implementing year and accompanying investor our new investment policy. restraint, CDC is cautiously optimistic that in 2010 emerging A major highlight of my first year markets will strengthen and begin as Chairman of CDC was the to attract the capital that is vital publication of our first ever to their economic development. development impact report, ‘Growth for Development’. A huge The high levels of uncertainty in amount of work and effort went early 2009 meant that trading into its production and it signifies conditions were still weak, with that CDC is determined to look at fund managers and businesses the wider development impact of reluctant to undertake new what we do. Understanding the business. As the year went on, impact of our work in supporting business and consumer confidence economic development means we in many developing countries will need to evaluate continually returned and enabled CDC to and learn from our experiences. achieve positive returns of £207m This year’s updated development this year, increasing the company’s impact report will build on the net value to £2.5bn. lessons we have learnt. CDC Group plc Financial Review 2009 3

As well as providing the capital for I am very privileged to have taken investment in promising businesses over the role of Chairman from in poorer countries, CDC has been Sir Malcolm Williamson in April last at the cutting edge of some of the year. I am indebted to him for the thinking around supporting the excellent job he did in chairing private sector in the developing the Board for five years and world. The Royal African Society’s the leadership that he gave speech series that CDC sponsors in overseeing the remarkable has prompted considerable debate development of CDC during that and support, as did the seminar period. This year has also seen and launch event for our the appointment of one new development impact report. Putting Non-executive Director, Ian Goldin. innovative thinking into practice He will replace Jonathan Kydd who saw the CDC Board visiting has given 12 years of dedicated Bangladesh in November to meet contribution to CDC, during a investors, businesses and policy- period of immense change. We are makers in order to evaluate extremely grateful to him and thank conditions for investment in him for his hard work. the country and to make the case for private equity and its I would like to thank our developmental benefits. The Board shareholder DFID for all its support visited women benefiting from during the year. Finally, thank you CDC-supported microfinance to all the staff at CDC who have schemes as well as seeing performed admirably and with businesses that will benefit from great dedication during a the commitment CDC plans to challenging year. make to Frontier Fund Private Equity, the first ever Bangladeshi private equity fund. I was also lucky enough to visit Nigeria this year and I was struck by the incredible progress that its private sector investment Richard Gillingwater CBE infrastructure has made. From a Chairman very few funds providing business with risk capital in the late 1990s, the West African nation’s market has become competitive and now provides many opportunities for entrepreneurs to benefit from the added value of private equity investment. In this regard there are striking parallels with Bangladesh as that South Asian economy looks to expand its nascent investment network and build on its economic resurgence. 4 CDC Group plc Financial Review 2009 Our Business One of the most serious barriers to economic growth in poor countries is the shortage of risk capital to help promising businesses grow.

Mobilising CDC other capital people’s 1 money Fund We help mobilise managers private investment in poorer countries by demonstrating a successful track 4 2 record. Economic growth

Investee 3 companies CDC Group plc Financial Review 2009 5

CDC capital (p6)

CDC has assets of £2.5bn (US$4.0bn). Our purpose is to stimulate economic growth in emerging markets, particularly sub-Saharan 1 Africa and South Asia, by investing in the private sector.

Fund managers (p7)

Commitments are principally with local private equity fund managers who know and understand developing economies. 2 Managers are asked to target returns appropriate to asset class.

Investee companies (p10)

Fund managers raise capital from other investors, alongside CDC, thus increasing the levels of capital invested in poor 3 countries. Managers invest responsibly in accordance with CDC’s Investment Code.

Economic growth (p11)

Successful portfolio companies employ and train people and boost tax revenues for 4 their local governments. They also improve practices on environmental, social and governance issues. 6 CDC Group plc Financial Review 2009 Our Business – CDC capital No country has succeeded in reducing poverty in a sustainable manner without economic growth. Successful businesses employ and train people, 1 pay taxes and create and operate infrastructure.

Portfolio by region CDC’s objective is to invest in a CDC has not received any new commercially sustainable manner investment from its shareholder in the poorer countries of the for 14 years. However, by making 2 3 1 Africa 52% developing world and to attract successful investments, CDC has 2 Asia 43% 3 Other 5% others to invest by demonstrating more than doubled its net worth success. over the last five years, growing from £1,214m in 2004 to £2,535m CDC’s capital is focused on the in 2009. This has allowed CDC 1 private sector as the engine of to increase its investments in the growth. Investments: developing world. Net assets • provide much needed capital By demonstrating successful for growing businesses; and investment over the last five years, CDC’s current investment policy • attract other investors by has mobilised US$5bn of capital £2.5bn demonstrating success. commitment from other investors alongside CDC’s commitment. Since 2004, CDC has invested primarily through private equity New commitments funds that in turn invest in “CDC has made a credible companies in the poor countries contribution to economic of the world. This new investment development in poor countries model was created from a major £207m restructuring by CDC’s shareholder, while also encouraging other the UK Department for International foreign investors to engage Development (DFID). Two new with them.” private equity fund managers, CDC value growth (£m) Actis and Aureos, were created The UK National Audit Office to manage CDC’s existing Report on DFID’s oversight Profit 1,473 of CDC, 2008. 1,321 investments and CDC became Investment 1,114 a fund-of-funds business. 801 426 1,214 1,214 1,214 1,214 1,214

05 06 07 08 09

Fund drawdowns (£m)

436 412 359

257

156

05 06 07 08 09 CDC Group plc Financial Review 2009 7 Our Business – Fund managers CDC commits capital to funds managed by skilled fund managers who know and understand 2 emerging markets and the challenges they face.

CDC requires fund managers and Actis and Aureos were spun out Funds under management investee companies to adhere to of CDC into two independent responsible business practices. private equity fund management 3 1 Actis 46% CDC’s Investment Code sets out companies. 2 Aureos 5% the principles, objectives, policies 3 Others 49% and management systems which Actis is now a well established managers are asked to implement. name in emerging markets private Managers are also expected to equity and has substantial generate returns appropriate to operations in Africa, India, China, 2 1 the asset class. South East Asia and Latin America. Actis is still CDC’s single largest Increase in fund managers CDC encourages its fund managers fund manager, representing 46% of to take a proactive approach CDC’s funds under management. to investment opportunities. 65 By conducting in-depth market Aureos is widely recognised as 59 research and developing deep local the leading player in investing in networks, visibility is created on small and medium enterprises 42 opportunities. Many businesses (SMEs) in developing countries. 26 require pre-investment support to 13 meet the standards required by 05 06 07 08 09 international investors. In providing this support, the role is to guide, not New fund managers in 2009 do. Entrepreneurs of underlying portfolio companies must drive the process, demonstrating the vision and energy to build their business. 6 Working directly with entrepreneurs before investment helps build the relationship necessary to make the partnership successful. Total fund managers at end 2009 65

CDC’s 65 fund managers have local offices in 37 countries

More than 10 offices 5-10 offices 2-4 offices One office 8 CDC Group plc Financial Review 2009 Our Business – Fund managers continued

In 2009, CDC committed capital to 11 new funds and extended its list of fund managers by six. Details of some of these managers are as follows: Manocap manages the Sierra Investment Fund. It is a private equity fund manager that makes equity investments in SMEs. The management team headed by Tom Cairnes and Niall O’Cathasaigh is based in West Africa. They look for expansions, MBOs and venture capital investments in businesses with a high growth potential and a clear path to an exit. Investments are in the US$0.5m to US$5m range in equity or quasi-equity instruments. A controlling or minority stake may be taken depending on the particular needs of the business’ shareholders and managers. After investment, Manocap will work alongside the entrepreneur to help build the management team to achieve the business targets. Manocap’s local presence enables it to adopt a hands-on approach to its investments. Work with investee companies extends beyond financial performance supporting the development and implementation of environmental, social and governance management systems including the development of anti-corruption and money laundering policies. Berkeley Energy, managers of the Renewable Energy Asia Fund, is a private equity fund manager specialising in renewable energy infrastructure investments in developing markets with an initial focus on Asia. It was founded by principals TC Kundi, Robert Renfrew, Jeremy Smith and Alastair Vere Nicoll. Berkeley Energy seeks to make equity investments into development CDC Group plc Financial Review 2009 9

stage renewable energy projects. Project developers mature and 2009 CDC fund managers consolidate these investments into operating portfolios and generate Access Holding Horus – Development Finance superior returns through successful Actis ICICI Venture exits. Berkeley Energy has Adlevo Capital IDFC Private Equity presence in New Delhi, Manila and London. Advanced Finance & Investment IDFC Project Equity Group India Value Fund Advisers Development Partners Advent International Corporation International (DPI) is a London I&P Management based private equity fund advisory African Capital Alliance JS Private Equity business that is the investment African Lion Kendall Court adviser to African Development AIF Capital Partners I (ADP I), a private equity Keytone Capital Partners fund which invests throughout Altra Investments Kotak Mahindra Group Africa. ADP I will invest in Egypt, Ambit Pragma Ventures Kenya, Morocco, Nigeria and Legend Holdings South Africa, but DPI believes there Ascent Capital Partners Lok Capital is significant scope for investment Aureos Capital Lombard Investments outside the traditional economic Avigo Capital Partners centres. It will devote particular Manocap attention to post-conflict and newly Baring Private Equity Partners India Medu Capital liberalising economies such as Berkeley Partners Angola, Algeria, Democratic Minlam Asset Management Republic of the Congo, Ethiopia, BTS Investment Advisors Navis Capital Partners Mozambique and Rwanda. Business Partners New Silk Route Advisors Rabo Equity Advisors is a New Capital Today Nexxus Capital Delhi based fund advisor led by Caspian Capital Partners Patria Banco De Negocios Rajesh Srivastava. It advises the CDH Investments India Agribusiness Fund, the first Qiming Venture Partners private equity fund focused on Centras Capital Partners Rabo Equity Advisors the Indian food and agribusiness CITIC Capital sector. The Fund has committed Saratoga Capital capital of US$120m and expects to Citigroup Venture Capital International ShoreCap International make investments over a four year CMIMC Société Générale (Asset period with an average investment Cordiant Management) size of between US$3m to US$10m. It is sponsored by Development Partners International Sphere Holdings Rabobank and targets significant ECP Africa Travant Capital minority stakes in food and Ethos Private Equity Tripod Capital International agribusiness industries across the agricultural value chain, including FountainVest Partners (Asia) Tuninvest food processing, rural retail and Global Environment Facility Vantage Capital cold chain logistics. Although the sector is underdeveloped at the GroFin Ventureast moment, agribusiness in India Helios Investment Partners Zana Capital (formerly CMIA is a sector which has enormous Horizon Equity Capital Partners) potential due to rapid demographic and regulatory changes and represents for CDC an interesting development opportunity. 10 CDC Group plc Financial Review 2009 Our Business – Investee companies CDC’s fund managers invest in sustainable, responsibly managed private sector companies 3 across the full spectrum of business sectors.

Successful, sustainable businesses CDC Portfolio by sector Outstanding investment make a crucial contribution to their commitment value local economies. A thriving private £m £m 10 1 Financials 20% 9 2 Consumer 14% 8 sector is the engine of growth in Access Holdings 0.9 2.2 3 Industrials 13% 1 7 4 Energy & utilities 10% developing economies. It creates Advans 4.0 2.6 5 ICT 10%* jobs, generates tax revenues and Aureos Africa Fund 26.5 19.3 6 6 Healthcare 8% Aureos Central America Fund 1.9 2.9 2 7 Infrastructure 8% drives prosperity thus achieving 5 8 Mining 6% sustainable economic development. Aureos Central Asia Fund 9.0 2.7 9 Agribusiness 5% 4 3 Aureos China Fund 7.9 4.9 10 Others 6% At the end of 2009, CDC had Aureos East Africa Fund 0.2 5.2 investments in 794 companies Aureos Latin America Fund 10.6 7.0 Aureos Malaysia Fund 4.9 0.9 Underlying portfolio by region in 71 countries covering a broad range of sectors. Aureos South Asia Fund 9.8 10.6 Aureos South Asia Fund I 3 4 Development depends on (Interim) 0.7 2.0 1 Africa 52% Aureos South East Asia Fund 4.1 9.2 2 South Asia 24% investment in businesses of all Aureos Southern Africa Fund 1.1 7.7 2 3 Asia Pacific 19% sizes and in all sectors. A broad- 4 Americas 5% based economy is a pre-requisite Aureos West Africa Fund 0.8 5.7 of sustainable economic growth. Avigo SME Fund II 2.5 12.7 Avigo SME Fund III 11.0 1.2 1 CDC has a particular interest in Ayojana Fund – 0.3 small and medium size enterprises Business Partners International *Information, Communications and Technology Kenya SME Fund 0.4 0.5 (SMEs). It has £128.4m invested Catalyst Microfinance 6.6 1.9 and outstanding commitments Central America Investment of £114.2m in funds that invest Facility – 0.3 in SMEs and microfinance, as part India Financial Inclusion Fund 8.6 4.4 of its overall portfolio. Kula Fund II 1.5 1.4 Lok Capital 0.8 3.0 Minlam Microfinance Offshore Fund – 17.1 Nandi Investments – 0.6 Shorecap International 0.4 1.8 26 SME and microfinance funds 114.2 128.4 CDC Group plc Financial Review 2009 11 Our Business – Economic growth Emerging markets have experienced a slow down during 2009 but still had 4 economic growth in most cases.

The global economy is expanding countries, although affected by Real GDP growth (%) again after a year of contraction in weakening external demand, lower 2008. However, whilst advanced commodity prices and worker 10 economies contracted in 2009, remittances, are expected by the 8 emerging and developing IMF to have positive growth in both 6 economies continued to grow, 2009 and 2010. Economic growth 4 albeit at a much lower rate than across Africa slowed in 2009 but is 2 previously. Emerging and predicted to rise to 4.0% in 2010. 0 developing economies withstood –2 Asia the financial turmoil better than –4 many expected and their recovery, The global financial crisis had less 1970 1980 1990 2000 2010 led by Asia, is further ahead than effect in developing Asia where IMF Emerging and developing economies developed economies. The estimates of growth rates reduced Advanced economies Source: IMF staff estimates. International Monetary Fund (IMF) from 7.6% in 2008 to 6.2% in 2009, expects real GDP growth in but are predicted to rise to 8.5% Performance graph developing economies to have in 2010. In India the investment been 1.7% in 2009 and projections outlook is less robust with IMF for 2010 show this expanding estimating growth of 5.4% for to 5.1%. 2009 rising to 6.8% for 2010. 400 Africa Continued growth 325 The global recession was felt In summary, although growth strongly by South Africa whose slowed in 2009 in many instances, 250 economy is more highly integrated the trajectory is positive. Emerging 175 into global financial markets and economies need thriving, successful businesses to drive growth and whose natural resources sector 100 was hit by lower commodity prices. those businesses require patient, 2004 2005 2006 2007 2008 2009 responsible capital providers to CDC portfolio performance in US$ The IMF expects a fall in 2009 of MSCI Emerging Markets benchmark 2.2% in South Africa, but growth help them expand and succeed. of 1.7% in 2010. Other African 12 CDC Group plc Financial Review 2009 Statement from the Chief Executive Richard Laing

With the economic climate in our to provide solutions to the changing markets remaining fragile we were investment needs of our markets encouraged by the improving and, as part of a broader strategic situation on the ground in the latter direction, to begin building an part of the year. As the year ended, exposure to debt financing in a sense of optimism was starting to addition to equity risk capital. return as economic growth began to accelerate. For example, 2009 Similarly, we continue to strike GDP growth in India was 5.4% and a balance across a range of 1.7% for African nations. Towards investment activities and sectors. the end of the year we also began This approach is an essential part to see businesses recovering well of our commitment to supporting from the effects of the global broad-based economic recession. This played a key role development in the poorer in our positive returns of £207m countries of the world. For and the accompanying increase example, this year has seen CDC in net assets to £2.5bn. CDC’s commit to Berkeley Energy’s ongoing success means that in Renewable Energy Asia Fund, the last five years it has continued a first-time fund that will support to beat the MSCI index and has private sector companies aiming generated profits of £1.3bn. All to tap into the growing demand for profits are recycled to invest in clean energy infrastructure in Asia. yet more businesses. We also committed capital to Rabo Equity Advisor’s Agribusiness Tough times in our markets Lower liquidity and fewer exits in Fund, the first private equity fund At the start of 2009 CDC was not our portfolio means that we have in India focused solely on this alone in being apprehensive about had to cut back on new important sector. Shortly we expect the continuing impact of the global commitments, with US$335m to finalise a US$10m commitment recession on the countries in which committed to funds in 2009 to Frontier Fund Private Equity, the we operate. In this challenging compared with over US$800m in first fund of its kind in Bangladesh. environment, we had real concerns 2008. Global economic conditions over the opportunities for our fund mean that it is difficult to predict Our investment focus managers to make fresh cash flows and we have to watch 2009 saw the first year of CDC’s investments and secure exits. our cash balances carefully, new investment policy in operation. However, activity picked up and ensuring we have sufficient cash The new targets mean that 75% of the levels were higher than we had reserves in place to meet our fund CDC’s investments will be made in initially feared at the beginning commitments. In the absence of a low income countries and 50% in of the year. borrowing facility, our programme sub-Saharan Africa. In a difficult fundraising environment in Africa, Our fund managers worked well of new commitments has therefore had to be significantly reduced. CDC and other development to find opportunities in challenging finance institutions (DFIs) have market conditions and as a This is a frustration at a time when there is strong demand and need played a vital role in supporting consequence CDC invested private sector development when £359m in promising businesses for capital in the countries where we operate. other investors have been reluctant in poor countries. This significant to do so. In his statement on page level of investment at a time when Investment activities: meeting 2, our new Chairman mentions the many investors have pulled back the needs of our markets Sierra Investment Fund based in from our markets demonstrates CDC has a long history of Sierra Leone. By supporting this CDC’s vital role in supporting pioneering investment and in 2009 and other first-time funds, CDC private sector development in we looked at new ways of meeting is playing a vital additional role in developing countries during the the needs of our markets in the developing the investment capacity toughest times. CDC has invested current economic crisis. and private equity industries in just short of £2bn in the last five developing countries. years and CDC’s capital is now Our US$75m commitment to backing nearly 800 sustainable the IFC’s Global Trade Liquidity As well as supporting first-time private sector businesses, a Programme helped to facilitate trade funds, we continue to back major impact on development at a time when trade finance for managers that are now raising in the poorest countries of developing countries was in short successor funds and proving that the world. supply. It reflected both our desire it is possible to invest successfully CDC Group plc Financial Review 2009 13

and responsibly in Africa. Although seeking other investors and During the year, the material attracting increasing amounts of expects to start investing in 2010. obligations of the CDC Pensions private sector capital, DFIs such as Scheme were mitigated when the CDC play a vital role in continuing Measuring our impact Trustees, with CDC’s consent, to provide much needed capital for Last year’s development impact purchased a £380m bulk annuity in successor funds until the time report, entitled ‘Growth for an innovative and ground breaking when DFI capital is no longer Development’, was the first of contract. The contract covers all required. Our relationship with its kind for CDC and was well members of the defined benefit Helios Investment Partners, a fund received by the investment and scheme and removes longevity and manager that started investing in development communities. We investment risk from the scheme, West Africa but which has are producing a new report to be thereby protecting CDC from subsequently expanded to other published alongside this report unforeseen future obligations and parts of sub-Saharan Africa, is a building on the feedback and providing improved protection case in point. As far back as 2004, lessons we have learnt. of the pensions. CDC worked closely with Helios in the fund manager’s earliest days Good progress was also made Prospects for 2010 offering advice as well as providing in developing our own processes, The worldwide economic recovery, 20% of the capital for their first particularly those concerned although still fragile, now appears fund, Helios I. Their second fund with the assessment of our to have momentum. This should was launched in 2009 and CDC development effects. In a result in an increased level of committed US$75m to their first challenging year for investment we confidence within our fund close which was required to make have worked closely with our fund managers in making exits and new the fund a sound proposition. Their managers to help them understand investments. Although it is still success in attracting greater the value in providing good data difficult to predict with any degree investor interest means that they and information. CDC has stepped of certainty, in 2010 we expect to can make a real difference and up its efforts to collect high quality see an increase in both cash support companies that would reporting from all fund managers receipts and new investments, otherwise miss out on the capital so that we are both in a better given the high level of outstanding and expertise that private equity position to understand and make commitments at £1,561m. In light investment provides. the case for the vital financial and of this, our programme of developmental impact our commitments to new funds for CDC’s mandate for pioneering investment has. As CDC now 2010 will remain lower than investment was further invests in 134 funds with 65 fund previous years. demonstrated by an initiative to managers, we have expanded the create the first ever sub-Saharan team that evaluates and measures Finally, I would like to extend my sustainable forestry fund. our impact on the ground. In thanks to the Board and our new Sustainable forestry can bring addition we brought in an Chairman, Richard Gillingwater for major economic and climate independent consultant, Triple their valuable advice and support. change benefits, especially in rural Value, to undertake more than a As always, I am immensely areas that lack employment third of the detailed evaluations we appreciative of CDC’s staff, whose opportunities. CDC has been do on our funds. Full details will be hard work and expertise, in a tough instrumental in this fund’s genesis. provided in the 2009 development economic climate, has seen CDC We identified the absence of capital impact report. make a major contribution to for sustainable forestry in the raising living standards in poor Corporate issues continent and in December 2008 countries around the world. published a request for proposals We spent considerable time during for a fund, with an indication that 2009 with our shareholder, the UK CDC would seed it with between government’s Department for US$50m and US$100m of capital. International Development (DFID), We received 11 proposals which reviewing the level of information were analysed and thoroughly flowing to them to ensure we strike reviewed. A shortlist was drawn the right balance between providing our shareholder with Richard Laing up with fund managers asked to Chief Executive present to CDC. A final choice was an appropriate level of useful made of GEF Management who and relevant information whilst manage a series of other funds preserving the strengths of the under the Global Environment Fund company’s corporate governance banner. The fund manager is now structure put in place by DFID. 14 CDC Group plc Financial Review 2009 Board of Directors

1. Richard Gillingwater CBE 3. Richard Laing Chairman Chief Executive Nominations Chair Co-Investment Chair Appointed Director in January 2000 and Chief Executive in July 2004. Appointed Non-executive Director in January 2009 and Chairman in Richard joined CDC in January April 2009. 2000 as Finance Director. He is a Trustee of the Overseas Richard has been Dean of Cass Development Institute, the UK’s Business School since April 2007. leading independent think-tank 1 He has previously held senior on international development, appointments in the City and and until January 2010 was a Government and most recently Non-executive Director of Aureos was Chairman of the Shareholder Advisers Limited, the leading Executive, the body created in emerging markets private equity September 2003 to improve fund manager for small and fundamentally the Government’s medium enterprises. performance as a shareholder in Government-owned businesses. Prior to CDC, he spent 15 years at After studying law and qualifying De La Rue where he held a number at Lovells, he began his career of positions both in the UK and as a banker with Kleinwort Benson. overseas, latterly as Group Finance He completed an MBA at IMD, Director. He was also a Non- 2 Lausanne while at Kleinwort executive Director of Camelot. He Benson before moving to BZW, previously worked in agribusiness where he rose to be Joint Head in developing countries, at of Global Corporate Finance. PricewaterhouseCoopers and After BZW’s takeover by CSFB at Marks and Spencer. he became Chairman of European 4. Arnab Banerji Investment Banking. In this role Non-executive Director he acted as an adviser to the Audit, Compliance and Risk Chair Government, which ultimately led to his appointment as Chief Appointed in July 2004. Executive of the Shareholder Executive. From November 2005 until October 2008, Arnab was responsible for 3 He is currently a Director of Cass emerging markets at Lansdowne Executive Education Ltd, a Non- Partners. From October 2001 to executive Director of Tomkins plc April 2005, he was the Prime and of Scottish and Southern Minister’s Senior Policy Adviser Energy plc. He was awarded a on Financial and City Affairs having CBE in the Queen’s Birthday also been appointed the Prime Honours List 2008 in recognition Minister’s Economic Adviser in of his services to the financial January 2004. Prior to that, he services industry. was Investment Chairman of the 2. Sir Malcolm Williamson Foreign & Colonial Group and Former Chairman served on the Advisory Council of the UK’s Export Credit Guarantee Department for three and a half 4 Appointed in January 2004 and retired in March 2009. years from January 1997. He was also a member of the Morgan Stanley Capital International Advisory Board for four years. He is a trustee of the Ethox Foundation (The Oxford Foundation for Ethics and Communication in Health Care Practice). CDC Group plc Financial Review 2009 15

5. Jonathan Kydd 7. Andrew Williams Non-executive Director Non-executive Director Best Practice and Development Remuneration Chair Chair Appointed in July 2003. Appointed in February 1997. Andrew was with the Schroder Group A development economist, for 25 years, latterly as Director of Jonathan holds a PhD from Sussex SVG Capital and Chief Executive University and has held academic Officer of its fund advisory business, appointments at the University of SVG Advisers, until March 2009. Malawi, Wye College, University 5 of London and Imperial College, Prior to joining Schroder Ventures, London. Presently, he is a Professor Andrew was co-head of equity at the University of London, capital markets at Shroders in Dean of the University of London’s London. Andrew is also a Non- External System and Visiting executive Director of Macquarie Professor at the Centre for Bank International Plc. Environmental Policy of Imperial 8. Ian Goldin College, London. Until recently Non-executive Director he was Chairman of the Advisory Council of the UK’s Export Credit Appointed in February 2010. Guarantee Department. He has been a special adviser to Ian is Director of the Oxford the UK House of Commons University’s James Martin 21st 6 International Development Select Century School. Ian is also Committee and has worked as a Professorial Fellow at the consultant to a range of national University’s Balliol College. and international development agencies, including the World Bank. From 1996 to 2001, Ian was at the World Bank, firstly as Director of 6. Fields Wicker-Miurin OBE Development Policy then as a Non-executive Director Vice President. From 1995 to 2001 he was Chief Executive of the Appointed in November 2004. Development Bank of Southern Fields is co-founder and partner Africa. During this period, Ian served on several South African of Leaders’ Quest, an international 7 organisation which inspires leaders Government committees and worldwide. Fields is a Non-executive boards, accompanied President Director of Savills and is a Governor Mandela on many state visits and of King’s College, London. was a founding board member of Comafin and the Africa Previously, Fields was Chief Infrastructure Fund as well as Financial Officer of the London a board member of Proparco. Stock Exchange and Chief Previously, Ian worked at the Operating Officer and Partner of European Bank for Reconstruction Vesta Group. She has advised the and Development as Principal European Union on financial sector Economist and prior to that reform and was a member of the at the OECD Development Centre NASDAQ Technology Council for in Paris, where he directed the 8 many years. She served on the DTI’s Programmes on Trade, Board of Directors for six years and Environment and Sustainable chaired the Investment Committee Development. advising on all government subsidies to business. Fields was awarded an Order of the British Empire in 2007 for services to international business. 16 CDC Group plc Financial Review 2009 Business Review – Africa CDC is the biggest private equity fund of funds player in Africa.

Between 2002 and 2007 sub- Saharan Africa’s output grew annually by some 6.5%, the highest rate in more than 30 years. But with the onset of the world recession, economic growth has faltered in many economies in the region. This will cause per capita income in the region to decline by about 1%, the first such drop in a decade. Sobering as this picture is, it is helped by the fact that prudent macroeconomic policies in recent years have given many countries some policy space to counter the effects of the slowdown. Growth in sub-Saharan Africa is projected to pick up from 1% in 2009 to just over 4% in 2010. Whilst the MSCI Emerging and Frontier Markets Africa US$ index rose by 48% in 2009 after the fall

Low income1 of 40% in 2008, the Nigerian US$ index, which fell by 58% in 2008, Middle income2 fell by a further 23% in 2009. This 1 Low income countries below US$905 is indicative of Nigerian exchange per annum GNI per capita. 2 Middle income countries up to rate and equity market issues US$11,115 per annum GNI per capita. rather than underlying economic All above as per World Bank (2006) and Development Assistance growth which was 6.0% in 2008 Committee country list. and 2.9% in 2009 according to IMF statistics.

Portfolio by fund manager Portfolio value Sub-Saharan Africa is a core destination for CDC’s capital. Many of Africa’s poorer nations remain at 3 1 Actis 58% 2 Aureos 5% the bottom of the rankings in the 3 Others 37% World Bank’s ‘Doing Business’ report and businesses face serious difficulties in attracting the capital

2 they need to grow and expand. 1 £731m CDC is the biggest private equity fund of funds player in Africa. Portfolio by sector New commitments in 2009 CDC entered 2009 with US$678m 1011 1 Financials 32% of uncalled capital commitments 8 9 7 2 ICT 13%* to funds investing in Africa. This 6 3 Energy and utilities 12% dry powder has assisted fund 4 Materials 10% 5 5 Industrials 10% managers and portfolio companies 6 Infrastructure 9% 1 to navigate through uncertain times 7 Consumer 5% 104 8 Agribusiness 4% in 2009, exemplified by a scarcity 3 2 9 Healthcare 3% of debt finance. The year presented 10 Microfinance 1% 11 Cleantech 1% £142m some interesting investment opportunities for our funds in *Information, Communications and Technology the financial sector. CDC Group plc Financial Review 2009 17

In 2009, which was a difficult year New investments by funds include: for managers raising funds, CDC committed US$230m to five Company Country Fund Description African funds as follows: Ciments du Senegal Aureos Africa Fund Cement production • US$75m to the Global Trade Sahel Liquidity Programme, which was Commercial Egypt Actis Africa Fund 3; Banking set up by IFC to address the International Actis Emerging growing issue of scarce liquidity Bank Markets Fund 3 in trade finance in emerging economies as a result of the Wananchi Group Kenya ECP Africa Fund III Cable global financial crisis; communication Financial Bank Togo ECP Africa Fund III Regional bank • US$50m to African Capital Alliance CAPE III, which will Sierra Fishing Sierra Leone Sierra Investment Fund Fish marketing invest predominantly in mid-sized companies in Nigeria; • US$25m to African Development Partners I, which will invest expansion capital across Africa but concentrate on post-conflict and newly liberalising countries; Five largest African underlying investee companies: • US$75m to Helios II, which will Company Country Description invest across sub-Saharan Africa Globeleq Pan-Africa Power in expansion or buy-out capital where value can be enhanced Alexander through an intensive operational Forbes South Africa Financial services focus; and DFCU Uganda Development finance • US$5m to Sierra Investment Diamond Bank Nigeria Financial services Fund, which is managed by a Actom South Africa Electrical engineering Freetown based private equity firm and represents the first such investment by a development finance institution since the end of the civil war. 18 CDC Group plc Financial Review 2009 Business Review – Asia Economic fundamentals are strong in the region and growth is again rising.

Low income1

Middle income2

1 Low income countries below US$905 per annum GNI per capita. 2 Middle income countries up to US$11,115 per annum GNI per capita. All above as per World Bank (2006) and Development Assistance Committee country list.

CDC has a vital role to play in Portfolio by fund manager Portfolio value Asia by actively monitoring and supporting its fund managers. Very 3 1 Actis 30% 2 Aureos 5% few fund managers in the region 3 Others 65% will have managed a fund through an economic tightening of the 1 degree experienced recently, which 2 is where CDC can add value. £607m The level of executed deals was lower in 2009 and for those fund Portfolio by sector New commitments in 2009 managers trying to raise a fund, the environment was difficult, 1 Consumer 22% 1112 910 2 Industrials 16% with international investors more 8 3 Healthcare 15% hesitant. However, economic 1 4 Infrastructure 8% 7 5 Energy and utilities 7% fundamentals are strong in the 6 6 Financials 6% region and growth is again rising. 7 Cleantech 6% 5 2 8 Agribusiness 6% Initial public offerings are returning 4 9 ICT 5%* and more deal flow is expected by 3 10 Microfinance 3% 11 Materials 3% £55m fund managers in 2010. 12 Education 3% The MSCI Emerging and Frontier *Information, Communications and Technology Markets Asia US$ index rose by 74% in 2009 after the fall of 53% in 2008. However, the performance of individual countries was variable and India rose by 103% whilst China only rose by 62% in 2009. CDC Group plc Financial Review 2009 19

Under the new Investment Policy, New investments by funds include: CDC no longer makes new fund commitments outside South Asia Company Country Fund Description and the Mekong region other than SME funds. In 2009 CDC Bharat Serums India Kotak Private Medical supplies committed US$88m to four Asian & Vaccines Equity Fund funds as follows: Essar Power India India Infrastructure Fund Power generation • US$10m to India Agribusiness Golden Foods Thailand Navis Asia Fund V Cooked chicken fund, the first private equity Siam products agribusiness fund in India. The Duoyuan China Global Environment Water treatment fund will target many food and Global Water Emerging Market Fund III equipment agribusiness sectors and will Wireless TT India IDFC PE Telecom towers additionally aim to invest in Info Services agribusiness infrastructure such as cold chain logistics, Hythro Power India Avigo SME Fund III Power transmission warehousing, dedicated ports Corporation and distribution and auction markets; • US$25m to Ascent India Fund III, which will focus on expansion capital in mid-market companies, primarily in Southern India; Five largest Asian underlying investee companies: • US$13m to Renewable Energy Asia Fund, which will take Company Country Description controlling interests in early stage Paras Pharmaceuticals India Healthcare renewable energy projects mostly in India; and Ceylon Oxygen Sri Lanka Industrial gases supplier 7 Days China Budget hotels • US$40m to India Value Fund IV, which will focus on controlling Xiabu Xiabu China Restaurant chain stake in large companies which Ambow China Education service provider require significant post- investment engagement to improve performance. 20 CDC Group plc Financial Review 2009 Performance Review Godfrey Davies Chief Financial Officer

Description of the business CDC’s investment strategy and objectives is to align its activities with its CDC is a government-owned shareholder’s objective of reducing investment company that invests poverty. The CDC universe consists in private sector businesses in of developing countries which are developing countries, where it defined by the World Bank as low has been an innovative investor or middle income countries. Until for over 60 years. CDC is part of the end of 2008, CDC had two the UK programme for promoting investment targets: 70% of new international development and investments in the poorest the reduction of poverty. The countries of the world (defined as government has no involvement in countries with an annual Gross CDC’s day-to-day decision-making National Income (GNI) per capita which is carried out by the CDC below US$1,750 in 2001); and 50% Board of Executive and Non- in sub-Saharan Africa and South executive Directors based in Asia. Both tests are measured London. CDC is required to operate over a five-year rolling period. commercially according to the On 3 November 2008, DFID highest standards of corporate announced a new investment governance. policy and targets for CDC. For commitments to funds up to the CDC’s objective is to invest in the end of December 2008, the above creation and growth of viable targets should be met. For new private businesses in developing CDC now has investments commitments to funds thereafter, countries to contribute to new investments must meet two in 134 funds managed by economic growth for the benefit new targets: 75% in low income 65 different fund managers. of the poor; and to mobilise private countries (defined as countries with investment in these markets both an annual GNI per capita below directly and by demonstrating US$905 in 2006); and 50% of new profitable investments. No country investments in sub-Saharan Africa. has succeeded in reducing poverty In addition, CDC may commit up in a sustainable manner in the to £125m in the next five years absence of economic growth. to SME funds in middle income Commercially sustainable private countries (defined as countries with sector businesses are critical to an annual GNI per capita below such growth: they employ and US$11,115 in 2006). In making train people, pay taxes, invest in investments CDC: research and development and build and operate infrastructure • targets an appropriate and services. Scarcity and unequal commercial return, which may access to long-term risk capital vary by geography, product constrain the establishment and or sector; growth of viable businesses in CDC’s target markets. • requires fund managers to invest in companies with a commitment to best practice including environmental, social policies and governance; and • aims to be catalytic and innovative in what it does. CDC Group plc Financial Review 2009 21

CDC and the businesses in which expects its managers to achieve Market conditions its capital is invested will: returns that are appropriate to the The MSCI Emerging Markets Index opportunities and risks in the is designed to measure quoted • comply with all applicable laws; relevant market. Amongst the equity performance in global features that CDC seeks in making emerging markets. In 2009, it rose • minimise adverse impacts and a decision to commit to a fund are: by 75% (2008: declined by 55%). enhance positive effects on the However, index increases of environment, workers and all • a credible thesis aimed at CDC’s individual countries varied widely in stakeholders as appropriate; preferred markets; 2009 with rises from South Africa 53%, China 59% and India 95%, • commit to continuous • a strong management team; improvements with respect to but with Nigeria falling by 25%. management of the environment, • prospective returns which are Key Performance Indicators social matters and governance; commensurate with the potential CDC is managed as a fund of risk; and • work to apply relevant funds investment business and international best practice • a management team that will this sectoral performance is standards, with appropriate apply high standards of business shown below. targets and timetables for ethics and corporate governance. Whilst CDC’s portfolio performance achieving them; and CDC evaluates fund performance was less than its MSCI benchmark in • employ management systems according to the financial 2009, on a three year rolling basis it which effectively address performance of the funds and the was 6% ahead of the benchmark. environmental, social and development impact which the Total return after tax for the period governance (ESG) risks and funds have had in terms of creating was £207.0m (2008: loss of realise ESG opportunities as profitable businesses that are £359.0m). The fund total return a fundamental part of a economically sustainable, have after tax was 9% (2008: loss of company’s value. a positive impact on the private 13%) a net return on investments sectors in which they operate and of 16% in the last five years. Strategies for achieving the seek to minimise environmental objectives of the business damage. Investment Policy new investment CDC carries out its mission mainly targets were exceeded. by investing in private equity and The underlying investee companies other intermediated collective of the funds in which CDC invests Third-party funds mobilised investment vehicles. As a fund pay taxes in their country of alongside CDC’s capital amounted of funds, CDC places its portfolio operation. However, under the to US$1,200m (2008: US$2,170m). with skilled private equity fund CDC Act 1999, CDC Group plc However, the ratio of capital managers in its target markets. was granted exemption from UK mobilised to CDC capital rose from CDC also co-invests alongside Corporation Tax from May 2003. 328% in 2008 to 452% in 2009. certain fund managers. Before This allows CDC to recycle investing in a fund, extensive more portfolio receipts as new due diligence is undertaken to try investments in developing to ensure that top-quality fund countries. CDC has not received managers have been chosen who any new investment from its will deliver above-average returns shareholder for 14 years. in the chosen markets. CDC 22 CDC Group plc Financial Review 2009 Performance Review continued

CDC value growth (£m) Current performance 2009 2008 Portfolio return £m £m Profit 1,473 In the past, CDC has measured its Net realised profits 61.0 21.9 Investment 1,321 1,114 portfolio performance against the Unrealised value 801 MSCI Emerging Markets US$ movements 165.5 (447.1) 426 index. However, the individual Portfolio return 226.5 (425.2) 1,214 1,214 1,214 1,214 1,214 country weightings within the index are rather different from the Operating costs (12.2) (13.0) 05 06 07 08 09 geographical spread of CDC’s Other net (expenses)/ portfolio. In conjunction with income (7.3) 79.2 Morgan Stanley, an index weighted Total return after tax 207.0 (359.0) Fund drawdowns (£m) by CDC’s geographical spread of countries has been developed Third-party funds mobilised 436 412 to form a new MSCI benchmark One of CDC’s objectives is to mobilise 359 for performance. third party capital investment in 257 emerging markets by demonstrating The portfolio generated £61.0m the benefits of successful investment 156 of realised profits (2008: £21.9m) to other capital providers. During which arose mainly from legacy 05 06 07 08 09 2009 third-party funds mobilised portfolio yield and exchange gains. alongside CDC’s capital invested has been measured as follows. The unrealised valuation gain in New investments in 2009 by region Investments in fund closings prior to the portfolio was £165.5m (2008: the one in which CDC participates 1 Africa 61% £447.1m unrealised loss) driven 2 3 are not counted. Investment by others 2 Asia 34% by the rise in global markets partly 3 Americas 5% in funds when CDC has made a legal offset by currency losses from commitment and subsequently is Sterling’s appreciation against counted as mobilisation once the US dollar. subjected to a tapering factor. The 1 Operating costs tapering factor applied to a fund’s Operating costs for the year mobilisation value will depend on whether it is a first, second or a of £12.2m (2008: £13.0m) have New investments in 2009 by manager subsequent fund as follows: first reduced despite the increase in time funds have no tapering, Fund London office employees to 46 3 1 Actis 38% 2s are tapered by 25%, Fund 3s 2 Aureos 7% (2008: 41) due to lower spending 3 Others 55% are tapered by 50%, and Funds 4 on consultants and legal fees. onwards are tapered by 75% so Operating costs represent 0.5% that only 25% of investment by of funds under management which others counts as mobilisation. The 1 compares favourably with industry tapering factor is applied to reflect 2 benchmarks of up to 1%. the growing importance of the fund manager’s track record as he raises Other net expenses subsequent funds. The mobilisation Other net expenses of £7.3m target set is on a three year rolling (2008: £79.2m gain) are much basis at 200%. Actual mobilisations lower this year as cash held earns at 278% exceeded the target. lower interest and there are In 2009 mobilisation amounted translation losses on US$ cash to US$1,200m (2008: US$2,182m). held compared with gains in 2008. However, the ratio of capital Total return after tax mobilised rose from 331% in 2008 to 377% in 2009. The overall result is a total return 2009 2008 after tax of £207.0m (2008: loss of £m £m £359.0m). As a return on opening total net assets on a valuation Portfolio 1,410.9 927.7 basis, this represents a return for Net cash and CDC’s shareholder of 9% (2008: short-term deposits 977.9 1,268.2 loss of 13%) this year and an Other net assets 146.0 131.9 average annual return of 16% Total net assets on over the last five years. a valuation basis 2,534.8 2,327.8 CDC Group plc Financial Review 2009 23

Total net assets increased in the were 46% in sub-Saharan Africa Portfolio cash generated (£m) year from £2,327.8m to £2,534.8m, and 53% in low income countries a rise of 9% (2008: fall of 13%). exceeding the targets of 27% and 40% respectively. 986 2009 2008 £m £m Fund cash generated Portfolio at start There was a lower level of portfolio 508 of year 927.7 1,184.1 cash generated this year at £161.6m 407 162 New investments 359.3 436.0 (2008: £267.7m). The main fund 268 05 06 07 08 09 Realisations (48.0) (245.3) receipts in 2009 were from Actis Infrastructure Fund II, legacy Unrealised value portfolio yields and repayments. Cash and outstanding commitments movements 171.9 (447.1) at 31 December 2009 (£m) Portfolio at end Net cash and short-term deposits held Cash held of year 1,410.9 927.7 Outstanding 1,561 With the higher level of fund commitments The portfolio, which consists of drawdowns and lower portfolio 978 investments in funds managed realisations, cash and short-term by fund managers and the legacy deposits were lower at £977.9m portfolio managed by Actis, (2008: £1,268.2m). A substantial increased from £927.7m to portion of this balance is placed on 100% 160% £1,410.9m, a 52% increase. deposit with the UK Government’s The increase came from new Debt Management Office. However, MSCI benchmark investments and valuation gains cash will be recycled into fund investments and current outstanding 170 driven by market conditions. The 160 1,561 20 largest underlying investments commitments for investment which 150 stand at £1,561.0m, representing 140 are shown on pages 26 and 27. 130 an overcommitment of 60%. 120 2009 2008 110 £m £m Fund managers 100 CDC actively reviews fund 90 Fund drawdowns (359.3) (436.0) 80 100% 160% proposals from private equity fund 70 Fund cash 2006 2007 2008 2009 managers within its investment generated 161.6 267.7 CDC universe. In 2009, CDC made MSCI Emerging & Frontier Markets Custom Country Weighted Index Net fund flows (197.7) (168.3) 11 new fund commitments of Hedging (52.9) – US$335m (2008: US$885m) Other cash flows (39.7) 31.5 as follows:

Net cash flow (290.3) (136.8) US$m Capital Alliance Private Equity III 50 Drawdowns by funds for new 25 investments at £359.3m (2008: African Development Partners I £436.0m) were lower than last year Ascent India Fund III 25 with reduced drawdowns from Asia. European Financing Partners III 7 New investments Global Trade Liquidity 75 With new investments at 75% in Programme poor countries and 64% in sub- Helios II 75 Saharan Africa and South Asia, the India Agribusiness Fund 10 rolling five-year targets of 70% and India Value Fund IV 40 50% respectively for the old book were exceeded. Renewable Energy Asia Fund 13 Shorecap II 10 During 2009 new investments from Sierra Investment Fund 5 commitments made after 1 January 2009 were 96% in sub-Saharan Total commitments including Africa and 100% in low income co-investments in 2009 335 countries, exceeding the targets of 50% and 75% respectively. Also CDC now has investments in during 2009, new investments from 134 funds managed by 65 different commitments made prior to 2009 fund managers. 24 CDC Group plc Financial Review 2009 Performance Review continued

CDC fund commitments and investments CDC CDC Outstanding investment Outstanding investment commitment value commitment value £m £m £m £m Actis 10 Legacy Funds – 117.5 Access Holdings 0.9 2.2 Actis Africa Fund 2 6.1 123.6 Adlevo Capital 9.3 – Canada Investment Fund for Africa 0.4 7.4 Advans 4.0 2.6 Actis Africa Empowerment Fund 1.9 17.0 Advent Latin America Actis Africa Real Estate Fund 46.3 51.5 Private Equity Fund IV 3.8 10.0 Actis Agribusiness Fund 11.0 25.5 African Development Partners I 14.2 2.8 Actis ASEAN Fund 18.4 7.9 African Lion – 0.2 Actis Assets Fund 2 – 2.2 African Lion 2 – 1.4 Actis China Fund 2 1.3 18.0 African Lion 3 8.1 1.0 Actis India Fund 2 6.0 51.6 AIF Capital Asia III 11.0 22.2 Actis India Real Estate Fund 24.0 3.6 Altra Private Equity Fund I 3.8 2.2 Actis South Asia Fund 2 5.5 52.6 Ascent India Fund III 15.5 – Actis Umbrella Fund 1.6 9.3 Ambit Pragma Fund 9.0 2.8 Actis Infrastructure Fund II 282.9 69.7 Atlantic Coast Regional Fund 7.0 1.9 Actis Emerging Markets Fund 3 90.4 32.8 Avigo SME Fund II 2.5 12.7 Actis Africa Fund 3 60.7 33.5 Avigo SME Fund III 11.0 1.2 Actis India Fund 3 54.6 7.2 Baring India Private Equity Fund II 1.9 4.3 Actis China Fund 3 43.5 19.3 Baring India Private Equity Fund III 27.6 5.0 Actis Latin America Fund 3 57.6 0.9 BTS India Private Equity Fund 4.8 7.5 28 Actis managed funds 712.2 651.1 Business Partners Aureos 7 Legacy Funds – 0.6 International Kenya SME 0.4 0.5 Aureos Central America Fund 1.9 2.9 Capital Alliance Private Equity I – 9.7 Aureos Central Asia Fund 9.0 2.7 Capital Alliance Private Equity II 1.6 9.4 Aureos China Fund 7.9 4.9 Capital Alliance Private Equity III 30.9 – Aureos East Africa Fund 0.2 5.2 Capital Alliance Property Aureos Latin America Fund 10.6 7.1 Investment Company 15.0 4.0 Aureos Malaysia Fund 4.9 0.9 Capital Today China Growth Fund 6.4 15.8 Aureos South Asia Fund I (Interim) 0.7 2.0 Catalyst Microfinance Fund 6.6 1.9 Aureos South Asia Fund 9.8 10.7 CDH China Fund III 14.3 30.5 Aureos South East Asia Fund 4.1 9.2 Central Africa Growth – 5.5 Aureos Southern Africa Fund 1.1 7.8 Centras Private Equity Fund 4.5 1.2 Aureos West Africa Fund 0.8 5.7 CITIC Capital China 2.8 17.4 Emerge Central America Growth Fund 1.6 1.2 CVCI Africa Fund 20.0 41.4 Kula Fund II 1.5 1.4 Dynamic India Fund VII 14.9 22.1 Aureos Africa Fund 26.5 19.3 ECP Africa Fund II 1.4 21.2 21 Aureos managed funds 80.6 81.6 ECP Africa Fund III 33.3 29.4 CDC Group plc Financial Review 2009 25

CDC CDC Outstanding investment Outstanding investment commitment value commitment value £m £m £m £m Ethos Fund V 6.1 8.9 Minlam Microfinance Offshore Fund – 17.1 European Financing Partners 6.9 6.3 Navis Asia Fund IV – 7.5 European Financing Partners III 4.5 – Navis Asia Fund V 12.1 29.3 FountainVest China Growth Fund 20.1 8.4 New Silk Route Fund I 20.3 8.1 Global Environment Emerging Nexxus Capital Private Equity Markets Fund III 12.5 15.7 Fund III 5.8 7.9 Global Trade Liquidity Programme – 46.1 Patria-Brazilian Private Equity GroFin East Africa SME Fund – 1.1 Fund III 14.3 5.5 GroFin Africa Fund 15.8 1.8 Qiming Venture Partners 9.2 6.5 Helios Investors 2.2 33.3 Renewable Energy Asia Fund 8.0 – Helios Investors II 46.4 – Saratoga Asia II 21.0 11.7 Horizon Fund III 4.8 1.1 SGAM Al Kantara Fund 14.3 2.0 Horizon Tech Ventures – 1.1 Shorecap International 0.4 1.8 I&P Capital II 3.6 3.3 Shorecap II 6.2 – IDFC Private Equity Fund II 1.5 12.5 Sierra Investment Fund 3.1 – IDFC Private Equity Fund III 9.8 5.3 Sphere Fund 1 0.4 0.9 India Agribusiness Fund 4.3 1.9 Travant Private Equity Fund I 16.1 1.6 India Financial Inclusion Fund 8.6 4.4 Tripod Capital China Fund II 8.4 11.9 India Infrastructure Fund 45.8 15.1 Vantage Mezzanine Fund 0.2 8.2 India Value Fund II 0.4 1.9 Venture East Proactive Fund 8.7 3.1 India Value Fund III 6.7 7.4 Zana Capital Fund India Value Fund IV 24.8 – (formerly CMIA China Fund III) 2.8 16.1 International Finance 85 Other managed funds 768.0 710.0 Participation Trust (2004) 9.8 52.1 6 Co-investments 0.2 42.5 JS Private Equity I 19.1 2.2 Forward foreign exchange Kendall Court Mezzanine (Asia) Fund I 1.0 9.1 contracts – (74.3) Kendall Court Mezzanine (Asia) Total legal commitment to Bristol Merit Fund 10.3 9.2 134 funds at end 2009 1,561.0 1,410.9 Keytone Ventures 2.7 2.0 Kotak India Realty Fund 21.7 5.5 Kotak Private Equity Fund 19.3 1.9 Legend Capital IV 5.1 1.1 Lok Capital 0.8 3.0 Lombard Asia III 7.2 5.1 Maghreb Private Equity Fund II 5.7 10.7 Medu Capital Fund II 2.7 3.3 26 CDC Group plc Financial Review 2009 Performance Review continued

Largest 20 underlying investments of funds

Company Description

Paras Pharmaceuticals A leading Indian company producing over the counter healthcare and Invested by Actis Emerging Markets personal care products. Successes for Paras include the painkiller Moov Fund 3; Actis India Fund 2; which has taken market share from multi-national companies and further Actis India Fund 3; Actis South new products in new markets for hair and skin care. Asia Fund 2; Actis Umbrella Fund; Aureos South Asia Fund Globeleq Generation Limited Globeleq develops, owns and operates power generation facilities across Actis Infrastructure Fund II emerging markets. Globeleq currently owns Songas (a 190MW gas-fired generation project located in Tanzania) and has interests in two other power projects: Tsavo (a 74MW heavy fuel oil-fired power station in Kenya); and Azito (a 288MW gas-fired power project in Côte d’Ivoire). Alexander Forbes A diversified financial services company that operates as an intermediary Invested by Actis Africa Empowerment in the investment and insurance industries. Alexander Forbes is Fund; Actis Africa Fund 2; Actis represented in 30 countries with the majority of its operations in Umbrella Fund; Canada Investment South Africa. Fund for Africa; Ethos Fund V DFCU DFCU was founded in 1964 by CDC and the Ugandan Government. It is Invested by Actis Africa Fund 1 a commercial bank operating in leasing, housing finance and term lending. Diamond Bank Diamond Bank is the ninth largest bank in Nigeria (with a subsidiary in Invested by Actis Africa Fund 2; Benin Republic), with a strong focus on the SME and corporate sectors. Actis Umbrella Fund; Canada The bank currently has 120 branches, 1,800 staff and a 5% market share. Investment Fund for Africa ACTOM (formerly Major South African electrical engineering, manufacturing, distributing Alstom Electrical Industries) and contracting company for the power sector. The business has Invested by Actis Africa Fund 3; 22 production facilities, 26 operating units and 21 distribution centres Actis Emerging Markets Fund 3 employing over 5,000 people. Seven Energy An upstream oil and gas company initially focused on Nigeria but with Actis Africa Fund 2; Canada the ambition to expand in West Africa. The company has rights to a Investment Fund for Africa; 40% interest in the undeveloped onshore Uquo Field to the east Actis Umbrella Fund of the Niger Delta. Orascom The market leading mobile operator in Algeria with over 14m subscribers Invested by Actis Africa Fund 1 (as at November 2009). The company provides a range of prepaid and post paid voice, data and multimedia telecommunication services. Commercial International Bank The largest private sector commercial bank in Egypt. It has 152 branches, Actis Emerging Markets Fund 3; 472 ATMs and over 4,000 employees serving 700 corporate customers, Actis Africa Fund 3 400 Small and Medium Enterprise (SME) customers and 380,000 retail customers. Regal Forest A leading retailer of white and brown goods, electronics and furniture Invested by Actis Latin America (durable consumer goods) in El Salvador, Honduras, Guatemala and Fund 1 Nicaragua, with a market share of around 30% in each country. Savcio A repairs, services and replacement parts company. Africa’s largest Invested by Actis Africa Empowerment private sector repairer of electric motors, transformers and traction Fund; Actis Africa Fund 2; Actis drive systems. Umbrella Fund; Canada Investment Fund for Africa; Sphere Fund 1 CDC Group plc Financial Review 2009 27

Company Description

Empower Empower seeks to fill an unserved space in the international power Invested by Actis Infrastructure generation market, particularly in Africa, whilst delivering a lower-cost Fund 2 solution than those currently available to state off-takers, utilities (and their customers) and industrial customers. Specifically, Empower aims to be the interim power generation solution provider in emerging markets. Mozal A 500,000 tpa aluminium smelter in Maputo, Mozambique, Mozal 1, Invested by Actis Assets Fund 1 the US$1.34bn development which was launched in 1998, was the biggest single project investment ever made in Mozambique. The smelter, which was successfully completed six months ahead of schedule and more than US$100m under budget, officially opened on 29 September 2000. Capital Properties Holdings Capital Properties owns three office blocks totalling 19,000 square metres Invested by Actis Africa Real of space, on a single prime site in the heart of Dar es Salaam. Estate Fund Ceylon Oxygen Ceylon Oxygen Limited (COL) is Sri Lanka’s leading industrial and medical Actis South Asia Fund 2; gases manufacturer with an 80% market share. The company’s main Actis Umbrella Fund products include oxygen, nitrogen, nitrous oxide, argon, acetylene, food grade carbon dioxide and dry ice. Mineral Deposits Limited Listed on the Australian and Toronto Stock Exchanges, Mineral Deposits Actis Africa Fund 2; Canada Limited is a company with two mining projects in Senegal: The Sabodala Investment Fund for Africa; African Gold Project and the Grande Côte Zircon Project. Lion Fund 2; EMP Africa Fund 2 MTN Nigeria MTN Nigeria Communications Limited is a provider of mobile telecom Invested by Capital Alliance Private services, through the GSM platform. MTN Nigeria is part of the MTN Equity I; Capital Alliance Private Group, Africa’s leading cellular telecommunications company. MTN Equity II provides services in 223 Nigerian cities and towns, more than 10,000 villages and communities and a growing number of highways across the country. 7 Days Group Holdings Ltd One of the leading budget hotel chains in China. The company’s aim is to Actis China Fund 2; build a national franchise that is capable of providing an affordable, yet Actis China Fund 3; quality, hospitality service to the growing number of leisure and corporate Actis Emerging Markets 3; travellers in China. Actis Umbrella Fund SkyVision Holdings Limited A leading provider of reliable internet connectivity solutions (also called CVCI “IP trunking”) over satellite in sub-Saharan Africa. Xiabu Xiabu Xiabu pioneered the bar-style hot pot format which features an individual Actis China Fund 2; pot for every customer, instead of a traditional communal hot pot. Most Actis China Fund 3; stores are in office blocks and shopping malls providing affordable, fresh, Actis Emerging Markets 3; hygienic and healthy food. Actis Umbrella Fund 28 CDC Group plc Financial Review 2009 CDC Universe

Low income1

Middle income2

1 Low income countries below US$905 per annum GNI per capita. 2 Middle income countries up to US$11,115 per annum GNI per capita. All above as per World Bank (2006) and Development Assistance Committee country list.

Footnote

MSCI Emerging & Frontier Markets Custom Country Weighted Index Source: MSCI. The MSCI data is comprised of a custom index calculated by MSCI for and as requested by CDC. The MSCI data is for internal use only and may not be redistributed or used in conjunction with creating or offering any securities, financial products or indices. Neither MSCI nor any other third party involved in or related to compiling, computing or creating the MSCI data (the “MSCI Parties”) makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and the MSCI Parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to such data. Without limiting any of the foregoing, in no event shall any of the MSCI Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

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