Interim report for 1 January September 2014

Transcription

1 Interim report for 1 January September 2014 The Managing Director of Swedfund International AB herewith submits the interim report for the period 1 January 30 September The company s auditors have reviewed this interim report. Swedfund International AB is wholly owned by the Swedish state. The Company has, as of 30 September, 39 employees. As a development finance institution, Swedfund works on commercial terms with a special sense of social responsibility. Our mission, to help reduce poverty through sustainable business, rests on three cornerstones: impact on society, sustainability and financial viability. The investment activities and the offer to small and medium-sized enterprises establishment aid (Swedpartnership) in the form of a depreciation loan for investments are the tools. Objectives The Company shall contribute to the goal of Sweden s Policy for Global Development (PGD) for equitable and sustainable global development. The objectives of the Company s operations are the goal for Sweden s international aid, to contribute to the creation of conditions which lead to improved standards of living for people who live in poverty and oppression. The starting point for Swedish aid is based on the needs and circumstances of the poor and oppressed. Swedish aid strives to contribute to long-term, concrete results in the fight against poverty and to a financially, socially and environmentally sustainable development. The complete Owner s Instructions can be found at Swedfund s website. According to decisions made by the Annual General Meeting the Company shall strive to ensure that its average pre-tax return on equity exceeds the average interest rate on Swedish central government debt of one-year maturity. The return shall be measured over moving seven-year periods. Focus of activities In cooperation with strategic partners, the Company shall take part in investments that are not expected to be achievable with commercial financing alone. The Company contributes to sustainable entrepreneurship by: - Providing venture capital in countries where commercial actors regard the risk (real or perceived) as being too great and/or where there is no financial infrastructure. - Contributing with our comprehensive know-how of running a business in difficult markets on which we actively participate, to develop our portfolio companies' best practices in areas such as financial management and reporting, environment, human rights, working conditions, anti-corruption, business ethics, gender equality and diversity.

2 Choice of countries Swedfund shall invest in countries that qualify for development financing according to the OECD Development Assistance Committee (DAC) definition. Among the countries that are eligible for development financing according to the OECD Development Assistance Committee (DAC) definition the Company shall give priority to investments in Low Income Countries and Territories and post-conflict countries. Investments in Upper Middle Income Countries and Territories according to the DAC definition should take place only in countries with which Sweden is engaged in bilateral development cooperation. Swedfund s role in development cooperation is described in more detail on A detailed account of Swedfund s achievements and activities is provided in the 2014 Sustainability and Annual Report. Corresponding information for 2013 can be found in the integrated annual report Growing Power How Swedfund Helps Fight Poverty Through Sustainable Business. Swedfund has received honorable mention for its integrated accounting 2013 of the FAR, the association of accountants, auditors and advisers. Business activities during the first three quarters 2014 Result No divestments have been made that have significantly affected the result. Interest income related to the loan portfolio is higher than in the corresponding period last year owing to a larger loan portfolio. Income from Short-term placements and Cash and bank accounts is higher than in 2013, this also mainly due to higher volumes. Write-downs for the year are primarily attributable to a sharp decline in equity in a portfolio company which has thus fallen under the Company s rules for write-downs. The increase in costs can be attributed to a larger business volume. Approval of investments by the Board/Managing Director (KSEK) Region Amount Industry Africa Sub-Saharan Africa 97,630 Private Equity Fund Nigeria 96,615 Banking Kenya 63,736 Insurance Nigeria 64,896 Fertilizers Ghana 164,007 Finance Ethiopia 2,000 Health care Mocambique 53,331 Hotel Sub-Saharan Africa 2,021 Manufacturing Nigeria 70,076 Banking Total Africa 614,312 Eastern Europe Russia 2,830 Vehicle components Total Eastern Europe 2,830 Global

3 21,000 Health care 46,038 Climate/Energy Total Global 67,038 Total 684,180 SWEDFUND INTERNATIONAL AB Contracts signed for investments during the period (KSEK) Country Amount Industry Sub-Saharan Africa 2,021 Manufacturing Global 15,141 Health care Kenya 6,615 Health care Ghana 96,460 Finance Russia 2,830 Vehicle components Nigeria 107,047 Banking Sub-Saharan Africa 73,858 Private Equity Fund Total 303,972 * More information can be found on Swedfund s website Total disbursements during the period KSEK 300,743 (371,860). Six sales have been made of fund holdings. Holdings in six companies have been sold in their entirety, two in India (Belstar and Artheon Battery), one in Russia (Nordrus), two in China (Recupero and Prestando) and one in Estonia (Fors MW). A loan to a company in Bhutan has been closed without repayment, and one loan to a bank in Belarus has been pre-paid. Further, one loan to a hotel in Eqypt has been repaid in full and a loan to an Indian company has been closed without full repayment. Write-downs and reversals of previously written-down portfolio investments have been made in accordance with the principles established by the Board, except for a loan where negotiations are underway, and an equity investment where the restructuring process has begun and the assessment has been made, that in the event of a sale Swedfund would get back the book value of the shareholding. Swedpartnership Swedfund also offers small and medium-sized enterprises establishment aid in the form of a depreciation loan for investments in the transfer of know-how and equipment in countries in which it invests. Such projects shall be based on long-term commercial co-operation between the Swedish company and a company in the country where the project is to take place. Swedpartnership s financial support is described on The business exercises public authority. Agreements of depreciation loans during the period (KSEK) Region Amount Proportion Africa 3,069 17% Asia 7,424 39% Latin America 545 3% Eastern Europe 7,554 41% Total 18,592

4 Disbursed depreciation loans during the period (KSEK). Region Amount Proportion Africa 1,148 7% Asia 11,694 67% Latin America 273 2% Östeuropa 4,111 24% Totalt 17,226 During the period, eight projects are completed and the amount of MSEK 5.1 is written off, which means that the projects have been completed in accordance with the project plan. One loan has been repaid in full as the project never was completed. The company s result and financial position is provided in the following income statement and balance sheet, the cash flow statement and the accompanying notes and supplementary information This report is published in Swedish and English. In the event of any inconsistence between these language versions the Swedish version shall prevail.

5 Income statement Expressed in SEK thousand Note Sales of shares 2 Sales income 1, Acquisition costs Share dividend Interest and charges Income Expenses Net write-up and reversals of portfolio investments Reversals Write-downs Services sold Income Expenses Other portfolio income Other operating income Gross Profit Other external costs Personnel costs Depreciation of tangible fixed assets Other operating costs Operating profit Financial items Other interest income and similar profit/loss items Interest expenses and similar profit/loss items Profit after financial items Profit before tax Tax on the profit for the period - - Profit for the period

6 Balance sheet Expressed in SEK thousand ASSETS Fixed assets Tangible fixed assets Equipment Financial fixed assets Other long-term holdings of securites Deferred tax claim Total fixed assets Current assets Investments in portfolio companies Shares Loan claims Current receivables Income taxes recoverable Accounts receivables Other receivables Prepaid expenses and accrued income Current investments Cash and bank accounts Total current assets TOTAL ASSETS

7 Balance sheet Expressed in SEK thousand Shareholders equity & liabilities Shareholders equity Restricted equity Share capital Legal reserve Retained earnings Profit for the period Provisions Provisions for endowment insurances Long-term liabilities Liabilities to credit institutions Other liabilities Current liabilities Liabilities to credit institutions, current part of long-term liabilities Accounts payable Other liabilities Accrued expenses and prepaid income TOTAL SHARHOLDERS EQUITY & LIABILITIES Pledged assets and contingent liabilities Expressed in SEK thousand Pledged assets for liabilities to credit institutions Bonds and other securities Bank accounts Total pledged assets Other pledged assets and securities Pledged endowment insurances Contingent liabilities Guarantees issued for loan claims Contracted, but not disbursed, portfolio commitments

8 Shareholders equity Total Share Restricted Profit carried Profit for shareholders Expressed in SEK thousand capital reserves forward the period equity Shareholders equity Appropriation of profit according to annual general meeting: Capital contribution Profit for the period Shareholders equity Appropriation of profit according to annual general meeting: Capital contribution Profit for the period Shareholders equity The share capital consists of 50 shares each having a ratio value of 1,000.

9 Cash flow statement Expressed in SEK thousand Ongoing operations Profit after financial items Adjusted for non-cash items Tax paid Cash flow from current operations before changes in working capital Cash flow from changes in working capital Increase (-)/Decrease (+) in investment in portfolio Increase (-)/Decrease (+) in investment in operating Increase (-)/Decrease (+) in investment in operating Cash flow from current operations Investment activities Acquisition of tangible fixed assets Investments in financial fixed assets Cash flow from investment activities Finansing activities Capital contribution Increase (-)/Decrease (+) in loan liabilities Cash flow from financing activities Cash flow for the period Liquid assets at the beginning of the year Liquid assets at the end of the period Supplementary information to the cash flow statement Expressed in SEK thousand Interest paid and dividends received Dividends received Interest received Interest paid Liquid assets Liquid assets comprise: Cash and bank accounts Non-pledged current investments Total amount

10 Accounting principles and notes to the financial statements (Amounts in SEK thousand unless otherwise stated) General accounting principles This interim report is prepared in accordance with recommendation number 20 of the Swedish Financial Standards Council. The Company has prepared its financial statements in accordance with the Swedish Annual Accounts Act and the recommendations of the Swedish Financial Accounting Standards Council. From fiscal year 2014 annual report prepared by the application of the Annual Accounts Act and the Accounting Standards Board BFNAR 2012: 1 Annual Report and Consolidated Financial Statements (K3). The transition to the K3 has not led to any changes in valuation or presentation. To increase the readability of the income statement and give a true picture, the headings and items listed in the Swedish Annual Accounts Act or the recommendations for annual accounting issued by the Swedish Financial Accounting Standards Council have not been used. Costs directly ascribable to each item of revenue are net with specification of the items included in the net result. Endowment insurance is stated at it fair value on the asset side, as a provision as well as a pledged liability also at its fair valued. The company has received financial aid for Technical Assistance (TA) and Swedpartnership from the Swedish government. The effect that has had on the income statement is shown in Note 3. The Company has chosen not to post further tax assets related to net negative result. Note 1 Net turnover per geographic market and per line of business Net turnover per geographic market Africa Asia Eastern Europe Latin America Net turnover per operational area Sales of shares Share dividends Interest income Services sold Other portfolio income Note 2 Equity investments sold/wound-up during the year Total acquisition value of shares sold Written-down value of sold shares Acquisition value of shares sold for the year Payments received Capital gain/loss for the year

11 Note 3 Support for Technical Assistance and "Swedpartnership" Heading in Income statements Of which "Swedpartnership" Other operating income Other external costs Personnel costs Other operating costs Heading in Income statements Of which T/A funds Other operating income Other external costs Other operating costs The interim report is made up in accordance with generally accepted accounting standards for state owned companies (guidelines for external financial reporting), the information provided agrees with the actual conditions and nothing of material importance has been omitted that could affect the picture of the company created by the interim report. Stockholm, October 24, 2014 Anna Ryott Managing Director Our review report have been submitted 24 October 2014 PricewaterhouseCoopers AB Peter Nilsson