Management's Discussion and Analysis, Financial Statements, and Investment Portfolio Volume 2 Adding Value to Private Sector Investment 2004 Annual Report IFC'S ANNUAL REPORT ON THE WEB, THE INTERNATIONAL FINANCE CORPORATION promotes sustainable private sector www.ifc.org/ar2004, is a companion investment in developing countries. IFC is a member of the World Bank Group and is headquartered to this printed edition. It provides easy in Washington, D.C. It shares the primary objective of all World Bank Group institutions: to reduce navigation and downloading of data poverty and improve the lives of people in its developing member countries. related to IFC investment projects. Since its founding in 1956, IFC has committed more than $44 billion of its own funds and has arranged $23 billion in syndications and underwriting for 3,143 companies in 140 developing Note: The regional reports, project countries. IFC coordinates its activities with the other institutions in the World Bank Group--the listings, and other information on International Bank for Reconstruction and Development, the International Development Association, IFC operations during the 2004 fiscal the Multilateral Investment Guarantee Agency, and the International Centre for Settlement of year appear in Volume 1 of the Investment Disputes--but is legally and financially independent. Its 176 member countries provide Annual Report. its share capital and collectively determine its policies. The Corporation defines a commitment to include: (1) signed loan and equity (including quasi-equity) investment agreements; (2) signed guarantee agreements; and (3) risk management facilities that are considered ready for execution as evidenced by a signed ISDA agreement or a signed risk management facility agreement with a client. Currency is given in U.S. dollars throughout unless otherwise specified. All numbers reflect rounding. PAGE 2 C O N T E N T S Management's Volume 2 Discussion and Analysis LIMA, DE PEREIRA ADRIANO ENGLISH RIGHT: TO RICHARD LEFT FROM GUNAWAN, CREDITS MICHAEL C2PHOTO IFC 2004 ANNUAL REPORT ENGLISH, COVER, FRONT RICHARD POLLETT TED INTERNATIONAL FINANCE CORPORATION 2004 ANNUAL REPORT PAGE 25 PAGE 28 PAGE 51 Responsibility for Financial Investment External Financial Statements Portfolio Reporting Management's Discussion & Analysis of Financial Condition and Results of Operations I. OVERVIEW International Finance Corporation (IFC or the Corporation) is an international organization, established in 1956, to further economic growth in its developing member countries by promoting private sector development. IFC is a member of the World Bank Group, which also includes the International Bank for Reconstruction and Development (IBRD or the World Bank), the International Development Association (IDA), and the Multilateral Investment Guarantee Agency (MIGA). It is a legal entity separate and distinct from the World Bank, IDA, and MIGA, with its own Articles of Agreement, share capital, financial structure, management, and staff. Membership in IFC is open only to member countries of the World Bank. As of June 30, 2004, IFC's entire share capital was held by 176 member countries. IFC's principal products are loans and equity investments, with a small guarantee portfolio. Unlike most multilateral development institutions, IFC does not accept host government guarantees. IFC raises virtually all of the funds for its lending activities through the issuance of debt obligations in the international capital markets, while maintaining a small borrowing window with the World Bank. Equity investments are funded from net worth. During the year ended June 30, 2004 (FY04), IFC had an authorized borrowing ceiling of $3.5 billion (including $0.75 billion to allow for possible prefunding of the funding program for the year to June 30, 2005 (FY05) during FY04). IFC's capital base and its assets and liabilities are primarily denominated in US dollars. The Corporation seeks to minimize market risk (foreign exchange and interest rate risks) by closely matching the currency, rate bases, and maturity of its liabilities in various currencies with assets with the same characteristics. The Corporation controls residual market risk by utilizing currency and interest rate swaps and other derivative instruments. II. FINANCIAL SUMMARY Basis of preparation of the Corporation's financial statements The accounting and reporting policies of the Corporation conform to generally accepted accounting principles in the United States (US GAAP). The Corporation has traditionally prepared one set of financial statements and footnotes, complying with both US GAAP and International Financial Reporting Standards (IFRS). However, principally due to material differences between US Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 138, Accounting for Certain Derivatives and Certain Hedging Relationships (collectively SFAS No. 133), and its counterpart in IFRS, IAS No. 39, Financial Instruments Recognition and Measurement, it has not been possible for the Corporation to satisfy the requirements of both US GAAP and IFRS via one set of financial statements since the year ended June 30, 2000. IFC is actively monitoring developments related to accounting standards and the primary basis for preparation of its financial statements, all with a view to the necessary systems and controls to manage its various lines of business. IFC plans to resume presentation of its financial statements using IFRS by the year ending June 30, 2007. Unless stated otherwise, discussions of financial performance herein refer to operating income, which excludes the effects of adopting SFAS No. 133. The effects of SFAS No. 133 on net income are discussed in Section VII. Financial performance summary From year to year, IFC's operating income is affected by a number of factors, principally the magnitude of provisions for losses against its loans, equity investments and guarantees; loans in nonaccrual status and recoveries of interest on loans formerly in nonaccrual status; and income (dividends and capital gains) generated from its equity portfolio. A significant part of IFC's liquid assets portfolio is invested in fixed income securities, which are also subject to external market factors that affect the value of such securities, adding variability to operating income. Beginning in FY01, net income also includes net gains and losses on financial instruments other than from trading activities, pursuant to the implementation of SFAS No. 133. IFC has been consistently profitable since its inception in 1956, and recorded operating income for FY04 of $982 million, as compared with $528 million for the year ended June 30, 2003 (FY03), and $161 million for the year ended June 30, 2002 (FY02). The $982 million of operating income in FY04 was a record high for the Corporation, reflecting contributions across each of IFC's main business segments: loans, equities and treasury operations. The Corporation was able to record net income in FY04, including the effects of SFAS No. 133, of $993 million, as compared with $487 million for FY03 and $215 million for FY02. 2 IFC 2004 ANNUAL REPORT The Corporation's operating income for the past five fiscal years ended June 30 is presented below: 1,000 1 1 0 0 1 0 0 0 9 0 0 800 8 0 0 s 7 0 0 600 6 0 0 million 5 0 0 4 0 0 US$ 400 3 0 0 2 0 0 200 1 0 0 0 0 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 FY00 FY01 F is c a l yFY02 e a r e n d e d FY03 e 3 0 J u n FY04 The table below presents selected financial data for the last five fiscal years (in millions of US dollars, except where otherwise stated): As of and for the years ended June 30 2004 2003 2002 2001 2000 Net income highlights: Interest income 796 795 1,040 1,505 1,328 Of which: Interest and financial fees from loans 518 477 547 732 694 Income from time deposits and securities 278 318 493 773 634 Charges on borrowings (141) (226) (438) (961) (812) Net (losses) gains on trading activities (104) 157 31 87 (38) Income from equity investments 584 195 428 222 262 Of which: Capital gains on equity sales 381 52 288 91 132 Dividends and profit participations 207 147 141 131 130 Net gains (losses) on equity-related derivatives and custody & other fees (4) (4) (1) - - Release of (provision for) losses on loans, equity investments & guarantees 177 (98) (657) (402) (215) Net noninterest expense (330) (295) (243) (210) (145) Operating income 982 528 161 241 380 Net gains (losses) on other financial instruments 11 (41) 54 11 - Effect of accounting change - - - 93 - Net income 993 487 215 345 380 Balance sheet highlights: (1) Total assets 32,361 31,543 27,739 26,170 38,719 Liquid assets, net of associated derivatives 13,055 12,952 14,532 13,258 12,204 Loans and equity investments 12,312 12,002 10,734 10,909 10,940 Reserve against losses on loans and equity investments (2,033) (2,625) (2,771) (2,213) (1,973) Borrowings withdrawn and outstanding 16,254 17,315 16,581 15,457 14,919 Total capital 7,782 6,789 6,304 6,095 5,733 Key financial ratios: (2) Return on average assets (3) 3.1% 1.8% 0.6% 0.6% 1.1% Return on average net worth (4) 13.7% 8.2% 2.7% 4.1% 6.9% Cash and liquid investments as a percentage of next three years' estimated net cash requirements 116% 107% 109% 101% 103% Debt to equity ratio (5) 2.3:1 2.6:1 2.8:1 2.6:1 2.6:1 Capital adequacy ratio (6) 48% 45% 49% 48% 48% Total reserve against losses to total disbursed portfolio (7) 16.5% 21.9% 25.8% 20.3% 18.0% 1. In respect of loans, borrowings, and derivative assets and liabilities, the balance sheet and related disclosures as of June 30, 2004, June 30, 2003, June 30, 2002, and June 30, 2001, are not comparable with the balance sheet and related disclosures as of June 30, 2000, due to the effects of implementing SFAS No. 133. 2. Key financial ratios are generally calculated excluding the effects of SFAS No. 133. 3. Return on average assets is defined as operating income for the fiscal year as a percentage of the average of total assets at the end of such fiscal year and the previous fiscal year. 4. Return on average net worth is defined as operating income for the fiscal year as a percentage of the average of total net worth (excluding payments on account of pending subscriptions) at the end of such fiscal year and the previous fiscal year. 5. Debt to equity ratio is defined as the ratio of outstanding borrowings plus outstanding guarantees to subscribed capital plus retained earnings at the end of the fiscal year. 6. Capital adequacy ratio is defined as the ratio of capital (including paid-in capital, retained earnings, and general loss reserve) to risk-weighted assets, both on- and off-balance sheet. 7. Total reserves against losses to total disbursed portfolio is defined as reserve against losses on loans and equity investments as a percentage of the total disbursed loan and equity portfolio at the end of the fiscal year. IFC 2004 ANNUAL REPORT 3 - 4 - III.CLIENT SERVICES Business overview In partnership with private investors, IFC assists in financing the establishment, improvement, and expansion of private sector enterprises by making investments where sufficient private capital is not otherwise available on reasonable terms. IFC seeks to bring together domestic and foreign private capital and experienced management and thereby create conditions conducive to the flow of private capital, domestic and foreign, into productive investments in its developing member countries. In this way, IFC plays a catalytic role in mobilizing additional project funding from other investors and lenders, either through cofinancing or through loan syndications, underwritings, and guarantees. In addition to project finance (described below) and resource mobilization, IFC offers financial and technical advisory services to private businesses in developing member countries. It also advises member governments on private sector development matters. IFC's investments are normally made in its developing member countries. The Articles of Agreement mandate that IFC shall invest in productive private enterprise. The requirement for private ownership does not disqualify enterprises that are partly owned by the public sector if such enterprises are organized under local commercial and corporate law, operate free of host government control in a market context and according to profitability criteria, and/or are in the process of being totally or partially privatized. The Corporation's main investment activity is project financing. This encompasses "greenfield" projects, expansions, and modernizations. IFC also provides corporate credits to selected companies to finance ongoing programs of investment projects. In addition, the Corporation facilitates financing through financial intermediaries, covering project and general purpose lending and specialized lending products such as leasing, trade, and mortgage finance. These financial intermediaries function either as IFC's borrower, on-lending to private sector companies at their own risk, or as IFC's agent, identifying companies for direct loans from IFC. The Corporation applies stringent tests of enterprise soundness, project viability, and developmental impact in determining the eligibility of projects for its investments. IFC has historically delivered its mission primarily through investments. IFC has increased its efforts in frontier markets and sustainable development impact. As a result, the demands on the Corporation for associated advisory work and technical assistance have increased and continue to grow. In FY04, IFC established a funding mechanism for technical assistance and advisory services, funded by designations of IFC's retained earnings. This funding mechanism finances project development facilities, private enterprise partnerships and similar facilities focused on small and medium-sized enterprise development and similar initiatives. Amounts designated for technical assistance and advisory services are determined based on the Corporation's annual operating income in Amounts designated for technical assistance and advisory services are determined based on the Corporation's annual operating excess of $150 million, contemplating the financial capacity and priorities of the Corporation, and are approved by the Corporation's income in excess of $150 million, contemplating the financial capacity and priorities of the Corporation, and are approved by the Board of Directors prior to the issuance of the annual financial statements. Expenditures for the various approved technical assistance Corporation's Board of Directors prior to the issuance of the annual financial statements. Expenditures for the various approved and advisory projects are recorded as expenses in the Corporation's income statement in the year in which they occur, beginning in the technical assistance and advisory projects are recorded as expenses in the Corporation's income statement in the year in which they year ending June 30, 2005 (FY05), and have the effect of reducing retained earnings designated for this specific purpose. On [August 3, occur, beginning in the year ending June 30, 2005 (FY05), and have the effect of reducing retained earnings designated for this 2004], IFC's Board of Directors approved a designation of $225 million of the Corporation's retained earnings. Additional information specific purpose. On August 3, 2004, IFC's Board of Directors approved a designation of $225 million of the Corporation's retained on the funding mechanism for technical assistance and advisory services can be found in Notes A and K to the Corporation's FY04 earnings. Additional information on the funding mechanism for technical assistance and advisory services can be found in Notes A financial statements. and K to the Corporation's FY04 financial statements. Investment process and portfolio supervision IFC's investment process can be divided into six main stages: N Identification and appraisal N Board approval N Document negotiation N Commitment N Disbursement N Supervision The initial four stages are carried out under the responsibility of the Vice President, Investment Operations, while the fifth and sixth stages are overseen by the Vice President, Portfolio and Risk Management. The Corporation carefully supervises its projects to monitor project performance and compliance with contractual obligations and with IFC's internal policies and procedures. IFC's Board of Directors is informed of such matters and of recommended courses of action at regular intervals. 4 IFC 2004 ANNUAL REPORT - 5 - Investment program summary Commitments In FY04, the Corporation entered into new commitments totaling $4.8 billion, including $0.2 billion of signed guarantees, compared with $3.9 billion (including $0.4 billion of signed guarantees) for FY03. Loan and equity investment commitments pending disbursement at June 30, 2004 were $4.6 billion ($3.5 billion at June 30, 2003). Guarantees and client risk management facilities committed but not utilized at June 30, 2004, were $0.7 billion ($0.9 billion at June 30, 2003). FY04 and FY03 commitments comprised the following: 5,000 231 339 5,000 4,000 787 334 Guarantees and other 404 Guarantees & Other 4,000 3,000 344 Quasi-equity Quasi-equity millions Equity Equity 3,000 2,000 US$ 3,396 Loans 2,604 Loans 2,000 1,000 880 1,181 1,000 0 2003 0 IFC IFC 2004 Participants 2004 Participants IFC Participants FY04 FY04 FY03 Parti IFCcipants 2003 FY03 Fiscal year Disbursements IFC disbursed $3.2 billion for its own account in FY04 ($3.0 billion in FY03). The strong level of disbursements in FY04 and FY03, as compared to FY02 ($1.5 billion), reflects the results of the changed focus of the Corporation toward commitments as a measure of operational performance over the past two years, which has resulted in higher disbursement levels. In addition, in FY02, the Corporation faced a difficult investment climate in the emerging markets in which it operates, together with a changing product mix from direct investment products such as loans and equity investments to off-balance sheet products such as guarantees. At June 30, 2004, IFC's disbursed and outstanding loans and equity investments for its own account (disbursed investment portfolio) grew 3% to $12.3 billion ($12.0 billion at June 30, 2003). Approvals In FY04 IFC approved new investments for its own account, including guarantees and client risk management facilities, totaling $5.1 billion, representing 224 projects, compared with $4.0 billion in FY03, representing 186 projects. In addition, IFC approved loan participations (B-loans) arranged to be placed with financial institutions (Participants) for loans approved by the Corporation's Board of Directors totaling $1.1 billion in 30 projects in FY04 compared with $1.5 billion in 27 projects in FY03. FY04 and FY03 approvals comprised the following: 6 ,0 0 0 6,000 5 ,0 0 0 4 2 4 Guarantees and other 5,000 4 5 2 4 ,0 0 0 7 4 3 G u a ra n te e s & O th e r Quasi-equity 4 9 1 4,000 6 2 7 Q u a s i-e q u ity Equity millions 3 ,0 0 0 4 8 0 E q u ity 3,000 US$ 2 ,0 0 0 L o a n s Loans 3 ,5 1 4 2 ,3 9 3 2,000 1 ,0 0 0 1 ,1 3 1 1 ,4 5 8 0 1,000 2004 2003 0 s 2004 s 2003 IFC IFC Participant Participants IFC Participant IFC Participants FY04 FY04 FY03 FY03 F is c a l y e a r Approvals pending commitment for IFC's own account at June 30, 2004, including guarantees and client risk management facilities, were $2.4 billion ($2.9 billion at June 30, 2003). IFC 2004 ANNUAL REPORT 5 - 6 - Disbursed investment portfolio The Corporation's disbursed investment portfolio is widely diversified by sector and geographic region. The following charts show the distribution of the portfolio as of June 30, 2004 and June 30, 2003: Distribution of disbursed portfolio by sector 25 FY04 30 20 FY03 25 1520 portfolio 15 10 of 10 % 5 2003 5 2004 0 0 A B C D E F G H I J K L M N O A--Financetiland insurance B--Utilities Insuranc ities U minin tals tu Other & and rehousi r produ beverage nformation I--Nonmetallic mineral productmemanufacturingservi Collective invemine stmentvehicl J--Primary metals I Ch retail tra FinanceD--Transportationaand warehousing C--Oil, gas andasminingnd wa Oil, g and K--Chemicals manufacPrimary emicals and Paper and pulp tion a E--Industrial andortconsumer products M--Wholesaleraland retail trade hol W F--Food andrabeverages nsp N--Paper and pulp T G--Information Industrial andconsumeFood L--Accommodation and tourism services product and tourismesale O--Otherllic nmeta Accommodation H--Collective investment vehicles No Sector Distribution of disbursed portfolio by geographic region 2003 Latin America and Caribbean 2004 Asia 7% Europe and Central Asia 7% 8% 8% Sub-Saharan Africa Latin America and Caribbean 40% 41% Middle East and North Africa Asia 21% Europe and Central Asia 24% Sub-Saharan Africa Middle East and North Africa FY04 FY0322% 21% Disbursed B-loans The portfolio of disbursed and outstanding B-loans at June 30, 2004 totaled $5.1 billion in 204 transactions compared with $6.1 billion in 224 transactions at June 30, 2003. Additional information on IFC's investment portfolio as of and for the years ended June 30, 2004 and 2003 can be found in Notes C, D , E, F and G to the Corporation's FY04 financial statements. 6 IFC 2004 ANNUAL REPORT - 7 - Investment products Loans Loans account for the major part of the financing provided by IFC, representing 79% of the Corporation's disbursed investment portfolio as of June 30, 2004, as compared to 77% at June 30, 2003. Loans will generally have the following characteristics: N Term: typically amortizing with final maturities of up to 12 years N Currency: primarily in major convertible currencies, principally US dollar, and to a lesser extent, Euro, Swiss franc and Japanese yen N Interest rate: fixed or variable N Pricing: reflects such factors as market conditions and country and project risks; variable rate loans are generally tied to the 6- month LIBOR index in the relevant currency. Since the year ended June 30, 1999, IFC has offered local currency loan products to certain clients, provided the Corporation is able to hedge its local currency exposure through mechanisms such as cross-currency swaps or forward contracts. Fixed-rate loans and loans in currencies other than US dollars are normally transformed, using currency and/or interest rate swaps, into US dollar variable rate loans. On June 30, 2004, total loans disbursed and outstanding were $9.7 billion ($9.2 billion at June 30, 2003). At June 30, 2004, 85% (86% at June 30, 2003) of the Corporation's loans were US dollar-denominated. The currency composition of the loan portfolio at June 30, 2004 and 2003 is shown on the accompanying diagram: 0 2 , 0 0 0 4 , 0 0 0 6 , 0 0 0 8 , 0 0 0 1 0 , 0 0 0 1 2 , 0 0 0 10,000 FY04 8 , 2 8 6 U S d o l l a r s 8,000 7 , 9 7 7 FY03 6,000 9 8 4 4,000E u r o 9 0 7 2 0 0 4 2 0 0 3 2,000 O t h e r 4 7 0 c u r r e n c i e s 0 3 4 5 US Euro Other Total Dollars currencies 9 , 7 4 0 T o t a l 9 , 2 2 9 Equity Equity investments accounted for 21% of the Corporation's disbursed investment portfolio at June 30, 2004, as compared to 23% at June 30, 2003. IFC's equity investments are typically in the form of common or preferred stock and are usually denominated in the currency of the country in which the investment is made. Quasi-equity In addition to traditional equity investments, the Corporation provides financing through a variety of quasi-equity instruments, addition to traditional equity investments, the Corporation provides financing through a variety of quasi-equity instruments, which which constitute a growing portion of its investment portfolio. Quasi-equities include subordinated or convertible loans, asset-backed constitute a growing portion of its investment portfolio. Quasi-equities include subordinated or convertible loans, asset-backed securities, securities, mortgage-backed securities, and certain common or preferred shares with put and/or call features. Depending upon their mortgage-backed securities, and certain common or preferred shares with put and/or call features. Depending upon their characteristics, characteristics, quasi-equities may be classified as either loans or equity investments in the Corporation's balance sheet. At June 30, quasi-equities may be classified as either loans or equity investments in the Corporation's balance sheet. At June 30, 2003, the 2004, the Corporation's disbursed and outstanding quasi-equity portfolio totaled $1,645 million ($1,571 million at June 30, 2003), Corporation's disbursed and outstanding quasi-equity portfolio totaled $1,645 million ($1,571 million at June 30, 2003), of which $1,483 of which $1,483 million was classified as loans ($1,391 million at June 30, 2003) and $162 million was classified as equity million was classified as loans ($1,391 million at June 30, 2003) and $162 million was classified as equity investments ($180 million at investments ($180 million at June 30, 2003) in the Corporation's balance sheet. June 30, 2003) in the Corporation's balance sheet. - 8 - IFC 2004 ANNUAL REPORT 7 Loan participations (B-loans) IFC finances only a portion, usually not more than 25%, of the cost of any project. All IFC-financed projects, therefore, require other financial partners. The principal direct means by which the Corporation mobilizes such private sector finance is through the sale of participations in its loans, known as the B-loan program. Through the B-loan program, IFC has worked primarily with commercial banks but also with non bank financial institutions in financing projects since the early 1960s. About 200 commercial banks and institutional investors currently participate in IFC's B-loan program. Whenever it syndicates a loan, IFC will always make a loan for its own account (an A-loan), thereby sharing the risk alongside its loan participants. IFC acts as the lender of record and is responsible for the administration of the entire loan, including the B-loan. IFC charges fees to the borrower at prevailing market rates to cover the cost of the syndication of the B-loan. Since it began its loan syndication program, IFC has placed participations totaling $22.6 billion. Client risk management products IFC provides clients with access to asset and liability management tools such as currency swaps and interest rate swaps, caps and floors by acting as an intermediary between clients and market counterparties. IFC also provides risk-sharing structures and guarantees that allow its clients to transact directly with market counterparties. Guarantees and partial credit guarantees Guarantees represent a growing product line for the Corporation. Beginning in FY01, the Corporation began offering partial credit guarantees to clients covering, on a risk-sharing basis, client obligations on bonds and/or loans. The Corporation's guarantee is available for debt instruments and trade obligations of clients and covers commercial as well as noncommercial risks. IFC will provide local currency guarantees but generally only if the Corporation is able to fund its commitment in local currency terms, for example, by hedging its exposure in the swap market. Guarantee fees are consistent with IFC's loan pricing policies. During FY04, the Corporation signed $0.2 billion of guarantees, as compared with $0.4 billion in FY03. Underwritings and investment banking services IFC provides underwriting and placement services for equity, quasi-equity, and/or debt securities issues of private sector companies in IFC's developing member countries. It also structures and underwrites funds and pooled investment vehicles such as private equity investment funds. IFC is often a core investor in the enterprises it underwrites. Services are priced in conformity with market standards and practices, in consultation with international securities firms and financial intermediaries. Underwriting and other capital markets services requiring a financial commitment from IFC are subject to the same investment criteria and limits applicable to its loans and equity investments. The Corporation does not conduct any placement activities within the United States or directed at US investors in connection with securities offerings of private sector companies or pooled investment vehicles. Advisory activities The Corporation, on its own or through a department jointly managed with the World Bank, provides three general types of advisory services to member countries as well as to individual enterprises: N Special advisory services on project structuring and financial packaging N Financial advisory services provided to member governments or to private sector clients N Policy advice to governments on capital markets development and private sector development, including privatization and foreign investment. The Corporation also assists governments with developing the legal frameworks for privatizing their state-owned sectors, as well as with the sale of individual enterprises. Fees are charged for advisory services consistent with market rates charged for comparable services. IFC recorded such fees amounting to $41 million for FY04 ($51 million for FY03 and $40 million for FY02). Specially targeted assistance IFC has established a number of vehicles through which it provides specially targeted assistance to areas highly in need of development. In FY04, the Corporation contributed $29 million to such vehicles, compared with $28 million in FY03 and $22 million in FY02. In FY04, such vehicles included: N The World Bank Group's Global SME Capacity Building Facility, which funds partnerships and programs that support the core pillars of the World Bank Group's Small and Medium-Sized Enterprise (SME) strategy. N The Private Enterprise Partnership, which provides focused technical assistance, with the goal of helping build successful private businesses in the former Soviet Union region. N The Corporation's own Technical Assistance Trust Fund, which provides resources through which IFC can cofinance technical assistance being supported by donors. 8 IFC 2004 ANNUAL REPORT - 9 - IV. TREASURY SERVICES Liquid assets IFC invests its liquidity in highly rated fixed and floating rate instruments issued by, or unconditionally guaranteed by, governments, government agencies and instrumentalities, multilateral organizations, and AAA-rated corporate issuers, including mortgage- and asset- backed securities, and in time deposits and other unconditional obligations of banks and financial institutions. The Corporation manages the market risk associated with these investments through a variety of hedging techniques including derivatives, principally currency and interest rate swaps and financial futures. IFC's liquid assets are invested in five separate portfolios. MARKET MARKET MANAGED MANAGED PORTFOLIO PORTFOLIO VALUE * VALUE COMPRISING COMPRISING BY INVESTED IN BENCHMARK BENCHMARK P0 $0.2bn Funds awaiting disbursement Funds awaiting disbursement or IFC's Treasury IFC's Treasury Short-term deposits Short-term deposits US overnight Fed US overnight ($0.4bn) reinvestment reinvestment Department Department funds funds P1 $7.8bn Proceeds from market Proceeds from market IFC's Treasury IFC's Treasury Principally global Principally Since JJanuary 2001, anuary 2001, ($8.6bn) borrowings invested pending borrowings invested Department government bonds, government bonds, adjusted 3-month US US disbursement of operational disbursement of operational asset-backed securities, asset-backed securities, ddollar LIBID ollar LIBID **. Prior Prior loans and other AAA-rated other AAA-rated to January 2001, 6- January corporate bonds generally corporate bonds generally month US dollar dollar swapped into 6-month US swapped 6-month LIBOR dollar LIBOR LIBOR P2 $3.7bn Primarily the Corporation's Corporation's IFC's Treasury IFC's Treasury US Treasuries Treasuries and other 3-year duration US 3-year duration ($3.0bn) paid-in capital and accumulated capital accumulated Department sovereign and agency sovereign agency Treasuries*** Treasuries*** earnings that have not been have issues invested in equity and quasi-- invested equity quasi equity investments or fixed-rate investments fixed-rate loans P3 $1.1bn Proceeds from market Proceeds from market External External Global government bonds government Same as for P1 as ($1.0bn) borrowings borrowings managers and mortgage-backed mortgage-backed appointed by securities securities IFC IFC P4 $0.3bn An outsourced portion of outsourced portion of the P2 External External US Treasuries Treasuries and other Lehman Brothers Brothers ($0.0bn) portfolio managers managers sovereign and agency sovereign agency Intermediate Intermediate appointed by issues Treasury Index IFC IFC Total $13.1bn * at June 30, 2004 (June 30,2003) at June 30, 2004 (June 30,2003) ($13.0bn) ** adjustedadjusted 3US dollar LIBID=US dollar LIBOR-12.5 basis points. The net duration of the P1 and 3 month month US dollar LIBID=US dollar LIBOR-12.5 basis points. The net duration of the P3 benchmarks is approximately 0.25 years. P1 and P3 benchmarks is approximately 0.25 years. *** duration duration of P2 portfolio plus fixed-rate loans of P2 portfolio plus fixed-rate loans The P3 portfolio is not permitted to exceed 12% of the total value of liquid assets at any time. All portfolios are accounted for as trading portfolios. The Corporation has a flexible approach to managing the liquid assets portfolios by making investments on an aggregate portfolio basis against its benchmark within specified risk parameters. In implementing these portfolio management strategies, the Corporation utilizes derivative instruments, including futures, and options, and takes long or short positions in securities. All liquid assets are managed according to an investment authority approved by IFC's Board of Directors and investment guidelines approved by IFC's Finance and Risk Committee, a subcommittee of the Corporation's Management Group. - 10 - IFC 2004 ANNUAL REPORT 9 Capitalization The Corporation's capitalization as of June 30, 2004 and June 30, 2003 is as follows: Borrowings from market sources 2004 2003 Borrowings from the World Bank $5,421m $4,429m Paid-in capital Retained earnings and other Borrowings from market sources $2,360m Borrowings from the World Bank $2,361m Paid-in capital $134m Retained earnings & other $97m $16,157m FY04 FY03 $17,181m Borrowings The major source of IFC's borrowings is the international capital markets. Under the Articles of Agreement, the Corporation may borrow in the public markets of a member country only with approvals from that member and also the member in whose currency the borrowing is denominated. The Corporation borrowed $3.0 billion during FY04 ($3.5 billion in FY03 and $4.0 billion in FY02). In addition, IFC's Board of Directors has authorized the repurchase and redemption of and tender for debt obligations issued by the Corporation. During FY04, the Corporation repurchased and retired $33 million of outstanding debt ($116 million in FY03). IFC diversifies its borrowings by currency, country, source, and maturity to provide flexibility and cost-effectiveness. Outstanding market borrowings have remaining maturities ranging from less than one year to almost 30 years, with a weighted average remaining maturity of 11.9 years at June 30, 2004 (10.5 years at June 30, 2003). Market borrowings are generally swapped into floating-rate obligations denominated in US dollars. As of June 30, 2004 the Corporation had gross payables from borrowing-related currency swaps of $9.1 billion ($9.3 billion at June 30, 2003) and from borrowing-related interest rate swaps in the notional principal amount of $7.3 billion ($7.3 billion at June 30, 2003). After the effect of these derivative instruments is taken into consideration, all of the Corporation's market borrowings at June 30, 2004, and June 30, 2003, were US dollar- denominated. The weighted average cost of market borrowings after currency and interest rate swap transactions was 1.0% at June 30, 2004 (0.9% at June 30, 2003). Capital and retained earnings As of June 30, 2004 IFC's net worth (presented as Total Capital in the Corporation's balance sheet) amounted to $7.8 billion, up from the June 30, 2003 level of $6.8 billion. As of June 30, 2004 and 2003, IFC's authorized capital was $2.45 billion, of which $2.36 billion was subscribed at June 30, 2004, unchanged from June 30, 2003. Over 99% of this was paid in ($2.36 billion at June 30, 2004, and June 30, 2003). The Corporation has agreed to defer the payment dates for certain member countries. Pursuant to these arrangements, $1 million of subscribed shares remained unpaid at June 30, 2004, ($2 million at June 30, 2003). 10 IFC 2004 ANNUAL REPORT - 11 - V. ENTERPRISE RISK MANAGEMENT In executing its sustainable private sector development business, IFC assumes various kinds of risks. The Corporation's Strategic Risk: management has defined a comprehensive enterprise risk IFC Development Mission, management framework, within which it recognizes four main Environment, Social & risk groupings: strategic risk, credit risk, financial risk, and operational risk. Active management of these risks is a key Reputation determinant of the Corporation's success, and its ability to maintain a stable capital and earnings base, and is an essential part Credit IFC's Financial of its operations. As part of its enterprise risk management Risk: Enterprise Risk: framework, the Corporation has adopted several key financial and Client, Market, exposure policies and a number of prudential policies. Risk Country & Management Funding & Counterparty Liquidity FY04 enterprise risk highlights The Risk Management & Financial Policy Group is currently engaged in a project to revise IFC's capital allocation, pricing and Operational Risk: risk limit framework. The objective of this project is to review People, Systems, & and change IFC's policies in line with new business imperatives Processes and best practice in risk management. This work is also related to the work on performance measures and incentives and complements the work in the operational risk framework development of the Corporation. 1. Strategic risk IFC defines strategic risk as the potential reputational, financial and other consequences of a failure to achieve its strategic mission and, in particular, its sustainable development mandate. The overall management of strategic risk is effected through the definition and implementation of an annual strategy for meeting the Corporation's mission and guidelines for its investment operations and advisory services. The strategy is developed with Senior Management by the Operational Strategy Group, and is approved by the Board of Directors. The Operations Evaluation Group conducts ex post evaluations of the implementation of the Corporation's investment strategy on an on-going basis. Strategic risk includes the risk incurred by IFC in exercising its environmental and social development framework in member countries. Responsibility for managing this part of strategic risk rests with the Environmental and Social Development Department. The key guiding principles and policies established as part of the framework for controlling strategic risk are as follows: Guiding principles for IFC's operations Catalytic role: IFC will seek above all to be a catalyst in facilitating productive investments in the private sector of its developing member countries. It does so by mobilizing financing from both foreign and domestic investors from the private and public sectors. Business partnership: IFC functions like a business in partnership with the private sector. Thus, IFC takes the same commercial risks as do private institutions, investing its funds under the discipline of the marketplace. Additionality: IFC participates in an investment only when it can make a special contribution not offered or brought to the deal by other investors. Environmental and social policies The Corporation has developed a comprehensive set of Guidelines and Safeguard Policies to promote environmentally and socially responsible private sector investments. Project sponsors are given the Safeguard Policies for environmental and social issues to review prior to conducting their assessments, as well as the environmental, health, and safety guidelines specific to the particular industry, sector, and type of project. When making investments, IFC applies its standards to the project and its performance is monitored against those standards. Projects are expected to comply with the applicable policies and guidelines, as well as applicable local, national, and international laws. IFC 2004 ANNUAL REPORT 11 - 12 - FY04 strategic risk highlights In 2003, IFC's Environmental and Social Policies became widely recognized as best practice when twelve international commercial 2003, IFC's Environmental and Social Policies became widely recognized as best practice when 12 international commercial banks adopted them in the form of the Equator Principles, with 24 banks following suit in FY04. banks adopted them in the form of the Equator Principles, with 12 banks following suit in FY04. 2. Credit risk IFC defines credit risk as the potential reduction in value of on- and off- balance sheet assets due to a deteriorating credit profile of its clients, the countries in which it invests, or a financial counterparty. Credit risk is incurred in two areas of the Corporation's operations: (i) in its investment operations, where IFC provides loans, equity investments, guarantees and derivatives for clients in its developing member countries, and (ii) in its treasury operations, where credit risk is incurred with counterparties in its liquid asset investment, borrowing and asset-liability management activities. As part of its mandate, IFC is prohibited from accepting host government guarantees of repayment on its investments and, therefore, incurs commercial and sovereign risk on its investments. The Corporation's Risk Management & Financial Policy Group has oversight responsibility for overall credit risk management and, in addition, monitors and controls credit risk arising in IFC's treasury activities. With respect to IFC's credit risk exposures to clients in developing countries, the Credit Review Department also plays a key role. At origination of new investments, the Credit Review Department analyzes information obtained from the investment departments and provides an independent review of the credit risk of the transaction. After commitment, the quality of IFC's loan and equity investment portfolio is monitored according to supervision principles and procedures defined in the Operational Policies and Procedures. Responsibility for the day-to-day monitoring and management of credit risk in the portfolio rests with the portfolio management units of individual investment departments. Their assessments are subject to quarterly review, on a sample basis, by the Loss Provisioning Division of the Controller's and Budgeting Department. The Corporation's investment portfolio is subject to a number of operational and prudential limits, including limitations on single project exposure, single country exposure, and segment concentration. Similarly, credit policies and guidelines have been formulated covering treasury operations; these are subject to annual revision by the Risk Management & Financial Policy Group, and approval by the Finance and Risk Committee. Specifically, IFC has adopted the following key exposure policies: Investment operations+ 1. IFC does not normally finance for its own account more than 25% of a project's cost. 2. An equity investment in a company does not normally represent more than 35% of the company's total share capital, provided further that IFC is not the single largest shareholder. 3. Investment in a single obligor may not exceed 3% of IFC's total investment portfolio. 4. Equity plus quasi-equity investments in a single obligor may not exceed 3% of the Corporation's net worth plus general reserves, and straight equity investments may not exceed 1.5%. Portfolio Management+ 1. Total investments in a single country will not normally represent more than 12% of IFC's total investment portfolio or 25% of its net worth plus general reserves. Review trigger levels of between 1% and 6% of the portfolio are set for each country. 2. IFC lender of record disbursed exposure in a country may not exceed 10% for Heaviliy Indebted Poor Countries and 5% for all other countries. Exceptions for countries with low levels of external debt may be set by the Finance and Risk Committee. Lower trigger levels are set for certain countries. 3. The Corporation's total exposure to a single risk sector may not exceed 8% of the total investment portfolio. Lower review trigger levels are set for single sectors, and individually for the finance and insurance sector, based on IFC's total portfolio and the country exposure level. 4. IFC's held guarantees that are subrogated in local currency are limited to $200 million. + All exposures are net of specific reserves Treasury operations 1. Counterparties are subject to conservative eligibility criteria, currently restricted to banks and financial institutions with a minimum credit rating of A by leading international credit rating agencies. 2. Exposures to individual counterparties are subject to diversification caps. For derivatives, exposure is measured in terms of "worst case" potential exposure based on simulations of market variables. Institution-specific limits are updated monthly based on changes in counterparty size or credit status. 3. To limit exposure, IFC signs collateral agreements with counterparties that require the posting of collateral when net exposure exceeds certain predetermined thresholds, which decrease as a counterparty's credit rating deteriorates. 4. Because counterparties can be downgraded during the life of a transaction, the agreements provide an option for IFC to terminate all swaps if the counterparty is downgraded below investment grade or if other early termination events occur that are standard in the market. 5. Limits are also imposed on the volume of over-the-counter derivative transactions with individual counterparties. 6. For exchange-traded instruments, IFC limits credit risk by restricting transactions to a list of authorized exchanges, contracts and dealers, and by placing limits on the Corporation's open interest rate position in each contract. 12 IFC 2004 ANNUAL REPORT FY04 credit risk highlights IFC does not recognize income on loans where collectibility is in doubt or payments of interest or principal are past due more than 60 days unless management anticipates that collection of interest is expected in the near future. The amount of nonaccruing loans as a percentage of the disbursed loan portfolio, a key indicator of portfolio performance, decreased to 11.5% at June 30, 2004, compared with 16.7% at June 30, 2003. The principal amount outstanding on nonaccrual loans totaled $1,121 million at June 30, 2004, a decrease of 27% from the June 30, 2003 level of $1,543 million. The quality of IFC's investment portfolio, as measured by the aggregate risk level, improved during FY04, continuing the trend noted during the second half of FY03. As a result, total reserves against losses on loans and equity investments at June 30, 2004, decreased to $2,033 million ($2,625 million at June 30, 2003). This is equivalent to 16.5% of the disbursed portfolio, significantly below the level of 21.9% at June 30, 2003. The five-year trend of loss reserves is presented below: 27.5 27.5 25.0 25.0 25.8 22.5oilof 22.5 21.9 20.0 20.0portf 20.3 17.5 18.0 16.5 17.5%o 15.0 15.0 12.5 12.5 10.0 2000 2001 2002 2003 2003 10.0 FY00 FY01 F isc al ye ar en d e d Ju n e 30 FY02 FY03 FY04 IFC operates under the assumption that the guarantee portfolio is exposed to the same idiosyncratic and systematic risks as IFC's loan operates under the assumption that the guarantee portfolio is exposed to the same idiosyncratic and systematic risks as IFC's loan portfolio and the inherent, probable losses in the guarantee portfolio need to be covered by an allowance for loss. The allowance at June inherent, probable losses in the guarantee portfolio need to be covered by an allowance for loss. The allowance at 30, 2004, was $16 million ($30 million ­ June 30, 2003), based on the year-end portfolio, and is included in payables and other liabilities June 30, 2004, was $16 million ($30 million at June 30, 2003), based on the year-end portfolio, and is included in payables and other on the balance sheet. The reduction in allowance for the year, $14 million for FY04 ($1 million increase for FY03), is included in the liabilities on the balance sheet. The reduction in allowance for the year, $14 million for FY04 ($1 million increase for FY03), is release of provisions for losses (provision for losses) on loans, equity investments and guarantees in the income statement included in the release of (provision for) losses on loans, equity investments, and guarantees in the income statement. The Corporation has not suffered credit losses on its exposures to derivatives counterparties in its treasury operations. 3. Financial risk IFC defines financial risk in three components: (a) the potential inability to realize asset values in its portfolio sufficient to meet obligations to disburse funds as they arise ("liquidity risk"); (b) the potential inability to access funding at reasonable cost ("funding risk"); and (c) a deterioration in values of financial instruments or positions due to changes in market interest and exchange rates and the volatility thereof ("market risk"). Key financial policies IFC currently operates under a number of key financial policies as detailed below, which have been approved by its Board of Directors: 1. Disbursed equity plus quasi-equity investments (net of loss reserves) may not exceed 100% of net worth, and disbursed equity (net of loss reserves) may not exceed 50% of net worth. 2. Minimum liquidity (liquid assets plus undrawn borrowing commitments from the World Bank) must be sufficient at all times to cover at least 65% of IFC's estimated net cash requirements for the next three years. 3. The currency, rate basis, and maturity of loan assets must be closely matched to borrowings; trigger levels are defined, at which foreign exchange and interest rate exposures are hedged. 4. Capital (paid-in capital plus retained earnings plus general loss reserves) must equal at least 30% of risk-weighted assets. In addition, under IFC's Articles of Agreement, as long as IFC has outstanding borrowings from the World Bank, IFC's leverage, as measured by the ratio of IFC's debt (borrowings plus outstanding guarantees) to IFC's equity (subscribed capital plus retained earnings), may not exceed 4.0 to 1. - 14 - IFC 2004 ANNUAL REPORT 13 a. Liquidity risk Within the key financial policies described above, in practice the Corporation maintains, as a prudential measure, an operating liquidity target of not less than 70% of three years' net cash requirements, including projected disbursement and debt service requirements. The primary instruments for maintaining sufficient liquidity are the Corporation's liquid asset portfolios. As already noted, IFC distinguishes five such portfolios: N P0, which is generally invested in short-dated deposits, money market funds, and tri-party repos, reflecting its use for short-term funding requirements; N P1, which is generally invested in (a) foreign sovereign, sovereign-guaranteed and supra-national fixed income instruments (rated AA- or better); (b) US Treasury or agency instruments; (c) asset-backed securities rated AAA by at least two rating agencies and/or other AAA rated notes issued by Corporations; (d) interest rate futures and swaps to manage currency risk in the portfolio, as well as its duration relative to benchmark; and (e) cash deposits; N P2, which is generally invested in US Treasuries and other sovereign and agency issues; N P3, which comprises a global fixed income portfolio and a mortgage-backed securities portfolio; and N P4, which commenced on July 1, 2003, which is an outsourced portion of the P2 portflio. FY04 liquidity risk highlights At June 30, 2004, the Corporation's liquidity level stood at $13.1 billion, or 116% of its projected net cash requirements for three years ($13.0 billion, and 107% at June 30, 2003). b. Funding risk The Corporation's primary objective with respect to managing funding risk is, through the adoption of, the key financial policies described above, to maintain its AAA credit rating and, thereby, access to funding, as required, at the lowest possible cost. Access to funding is maximized, and cost is minimized, by issuing debt securities in various capital markets in a variety of currencies, sometimes using complex structures. These structures include borrowings payable in multiple currencies, or borrowings with principal and/or interest determined by reference to a specified index such as a stock market index, a reference interest rate, a commodity index, or one or more foreign exchange rates. FY04 funding risk highlights During FY04, the Corporation raised $3.0 billion ($3.5 billion in FY03) of funding at sub-LIBOR rates, consistent with FY03. During FY04, the Corporation raised $3.0 billion ($3.5 billion in FY03) of funding at sub-LIBOR rates. c. Market risk The Corporation's exposure to market risk is minimized by adopting the matched funding policy noted above and by using a variety of derivative instruments to convert assets and liabilities into 6-month floating rate US dollar assets and liabilities. Investment operations Implementation of the matched funding policy is a two-step process: funds are earmarked at Board approval stage and matched, with respect to interest rate and currency, at disbursement. Interest rate and currency exchange risk associated with fixed rate and/or non-US dollar lending is hedged via currency and interest rate swaps that convert cash flows into variable rate US dollar flows. Exposures to market risk resulting from derivative transactions with clients, which are intended to facilitate clients' risk management, are minimized by entering into offsetting positions with highly rated market counterparties. Liquid asset portfolios Consistent with the matched funding policy, the P0, P1 and P3 portfolios are strictly managed to variable rate USD dollar benchmarks, on a portfolio basis. To this end, a variety of derivative instruments are used, including short-term, over-the-counter foreign exchange forwards (covered forwards), interest rate and currency swaps, and exchange-traded interest rate futures and options. The Corporation also takes both long and short positions in securities in the management of these portfolios to their respective benchmarks. The primary source of market risk in the liquid asset portfolios is the P2 and P4 portfolios, which, in contrast, are managed to a three- year duration US dollar benchmark, with additional flexibility to deviate from the benchmark. P2 represents the portion of IFC's capital not disbursed as equity investments, and the benchmark reflects the chosen risk profile for this uninvested capital. P4 represents an outsourced portion of the P2 portfolio. 14 IFC 2004 ANNUAL REPORT - 15 - Borrowing activities Market risk associated with fixed rate obligations and structured instruments entered into as part of the Corporation's funding program is mitigated by using derivative instruments to convert them into variable rate US dollar obligations, consistent with the matched funding policy. Asset-liability management While IFC's matched-funding policy provides a significant level of protection against currency and interest rate risk, the Corporation can be exposed to residual market risk in its overall asset and liability management. This residual market risk is monitored by the Asset- Liability Management group within the Treasury Department. Residual currency risk arises from events such as changes in the level of non-US dollar loan loss reserves. This risk is managed by monitoring the aggregate position in each lending currency and hedging the exposure when the net asset or liability position exceeds $5 million equivalent, through spot sales or purchases. Residual interest rate risk may arise from two sources: N Assets that are fully match-funded at inception, which can become mismatched over time due to write downs, prepayments, or rescheduling; and N Differing interest rate reset dates on assets and liabilities. This residual risk is managed, first, by synchronizing interest rate reset dates on assets and liabilities at a portfolio level; and secondly by measuring the sensitivity of the present value of assets and liabilities in each currency to each basis point change in interest rates, with an action trigger of $50,000 on this measure. FY04 market risk highlights Total liquid asset returns (comprising interest, realized and unrealized gains and losses, and translation adjustments) were $177 million Total liquid asset returns (comprising interest, realized and unrealized gains and losses, and translation adjustments) were $177 million ($475 million in FY03 and $547 million in FY02), of which $21 million was attributable to the P2 and, beginning in FY04, the P4 million in FY03 and $524 million in FY02), of which $21 million was attributable to the P2 and, beginning in FY04, the P4 portfolio ($264 million in FY03 and $202 million in FY02). Currency translation gains for FY04, were $7 million ($8 million gain in portfolio ($264 million in FY03 and $202 million in FY02). Currency translation gains for FY04 were $7 million ($8 million gain in FY03 and $1 million loss in FY02). and $1 million loss in FY02). 4. Operational risk IFC defines operational risk as the potential for loss resulting from events involving people, systems and processes. These include both internal and external events, whether caused by a lack of controls, documentation, or contingency planning, or by breakdowns in information systems, communications, physical safeguards, business continuity, supervision, transaction processing, or in the execution of legal, fiduciary, and agency responsibilities. As such, operational risk covers the risks emanating from the manner in which an entity is operated as opposed to the way it is financed. Consistent with the Basel II Capital Adequacy guidelines, IFC is developing a matrix framework to analyze operational risk by identifying, for each area (people, systems and processes), which risks IFC will: (i) manage internally, as part of its ongoing business; (ii) alleviate through contingency planning; or (iii) insure externally, whether by sub-contracting, outsourcing or hedging, including insurance. Responsibility for the development of the framework for managing and monitoring operational risk, and for contingency planning for recovery from emergencies, rests with the Controller's and Budgeting Department. In respect of insurable operational risk, IFC's Insurance Services Group performs insurance reviews to identify the risks and assess the adequacy of existing insurance policies and limits. IFC seeks to mitigate the risks it manages internally by maintaining a comprehensive system of internal controls that is designed not only to identify the parameters of various risks but also to monitor and control those areas of particular concern. Key components of this effort are: IFC 2004 ANNUAL REPORT 15 - 16 - Key components of operational risk management N The Corporation has adopted the COSO1 control framework and a control self-assessment methodology to evaluate the effectiveness of its internal controls in people, systems and processes, and it has an ongoing program in place to cover all significant business operations. In addition, the COBIT2 methodology is used to supplement the COSO review of the information technology function. N The Internal Audit Department of the World Bank Group performs on-going independent review of the effectiveness of IFC's internal controls in selected key areas and functions. N To promote data integrity, the Corporation has formulated a Data Management Policy. The policy is enforced through a network of Departmental Data Stewards. N The Corporation has a New Products/Initiatives Assessment Group, with representation from key business and support functions, to ensure that processes and controls are in place to manage the risks in new products and initiatives, before they are executed. 1 COSO refers to the Internal Control - Integrated Framework formulated by the Committee of Sponsoring Organizations of the Treadway Commission, which was convened by the US Congress in response to the well-publicized irregularities that occurred in the financial sector during the late 1980s. 2 COBIT refers to Control Objectives for Information and Related Technology, first released in 1996, updated to the 3rd edition released in July 2000, sponsored by the Information Systems Audit and Control Association (ISACA). FY04 operational risk highlights IFC continues to focus on its preparedness to react to an emergency situation that disrupts its normal operations. During FY04, the Corporation has: N extended the scope of the back-up facilities available for its key systems; N completed the deployment of computing facilities to the homes of staff considered essential to maintaining key business activities in the event that the headquarters building becomes unavailable for use in an emergency situation; and N undertaken emergency response simulation exercises, to test the adequacy of its contingency planning and enhance the preparedness of its emergency management team. The Corporation is continuing a multi-year effort to analyze and develop enhanced methodologies for measuring, monitoring and managing operational risk in its key activities. During FY04, IFC has: N Continued a process mapping exercise to identify potential areas of exposure to operational risk in investment processes and provide a basis for quantifying potential risks; N Following a selective "proof of concept" basis for evaluation, made recommendations leading to the establishment of a regionally organized project risk management function in FY05, responsible for investment project administration and compliance monitoring; and N Continued to refine its COSO self-assessment process, with pilot implementation of a software tool designed to enable more rigorous, consistent and comprehensive risk identification and control assessment across all its activities. Management has carried out an evaluation of internal controls over external financial reporting for the purposes of determining if there were any changes made in internal controls during the year ended June 30, 2004, that had materially affected, or would be reasonably likely to materially affect, IFC's internal control over external financial reporting. As of June 30, 2004, no such significant changes occurred. Internal controls and procedures are those processes which are designed to ensure that information required to be disclosed is accumulated and communicated to management, as appropriate to allow timely decisions regarding required disclosure by IFC. Management has undertaken an evaluation of the effectiveness of such controls and procedures. Based on that evaluation, management have concluded that these controls and procedures were effective as of June 30, 2004. 16 IFC 2004 ANNUAL REPORT - 17 - VI. CRITICAL ACCOUNTING POLICIES The Notes to the FY04 financial statements contain a summary of the Corporation's significant accounting policies, including a discussion of recently issued accounting pronouncements. Certain of these policies are considered to be "critical" to the portrayal of the Corporation's financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. These policies include determining the level of the allowance for losses in the loan and equity investment portfolios, and valuation of certain financial instruments with no quoted market prices. Additional information about these policies can be found in Notes A, C, N and O to the FY04 financial statements. Reserve against losses on loans and equity investments The Corporation considers a loan as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the loan's contractual terms. The reserve against losses for impaired loans reflects management's judgment of the present value of expected future cash flows discounted at the loan's effective interest rate. The Corporation establishes a reserve against losses for equity investments when a decrease in value of the investments has occurred which is considered other than temporary. The reserve against losses for loans and equity investments includes an estimate of probable losses on loans and equity investments inherent in the portfolio but not specifically identifiable. The reserve is established through periodic charges to income in the form of a provision for losses on loans and equity investments. Investments written off, as well as any subsequent recoveries, are recorded through the reserve. The assessment of the adequacy of total reserves against losses for loans and equity investments is highly dependent on management's judgment about factors such as geographical concentration, industry, regional and macroeconomic conditions, and historical trends. The reserve against losses on equity investments also considers the management quality of the investee company and its financial condition. Due to the inherent limitation of any particular estimation technique, management utilizes three different and independent methods to provide estimates for the total loss reserve balance: (1) a simulation model, (2) country risk ratings and probability of crisis associated with those risks, and (3) a model of the Corporation's long-term historical portfolio experience. Changes in these estimates could have a direct impact on the provision and could result in a change in the reserve balance. The reserve against losses on loans and equity investments is separately reported in the balance sheet as a deduction of the Corporation's total loans and equity investments. Increases or decreases in the reserve level are reported in the income statement as provision for losses or release of provision for losses on loans, equity investments and guarantees. The reserve against losses on loans and equity investments relates only to the Client Services segment of the Corporation (see Note Q to the FY04 financial statements for further discussion of the Corporation's business segments). Valuation of financial instruments with no quoted market prices As part of its compliance with SFAS No. 133, the Corporation reports at fair value all of its derivative instruments and certain borrowings that the Corporation has designated as components of fair value hedges. In addition, certain features in various loan agreements, equity investment agreements, and borrowing contracts contain embedded derivatives that, for accounting purposes, are separately accounted as either derivative assets or liabilities, including puts, caps, floors, and forwards. Few of these instruments have a ready market valuation. Therefore, the fair values of the financial instruments with no quoted market prices are estimated using sophisticated pricing models of the net present value of estimated future cash flows. Management makes numerous assumptions in developing the pricing models, including the appropriate discount rates, interest rates, and related volatility and expected movement in foreign currency exchange rates. Changes in assumptions could have a significant impact on the amounts reported as assets and liabilities and the related gains and losses reported in the income statement. The fair value computations affect both the Client Services and Treasury segments of the Corporation (see Note Q to the FY04 financial statements for further discussion of the Corporation's business segments). Additional information can be found in Notes A, N and O to the FY04 financial statements. IFC 2004 ANNUAL REPORT 17 - 18 - VII. RESULTS OF OPERATIONS Overview The main elements of IFC's net income, and influences on the level and variability of operating and net income from year to year, are: ELEMENTS SIGNIFICANT INFLUENCES Operating income: Spread on interest earning assets Nonaccruals and recoveries of interest on loans formerly in nonaccrual status and income from participation notes Liquid asset income Realized and unrealized gains and losses on the liquid asset portfolios Income from the equity investment portfolio Performance of the equity portfolio (dividends and capital gains) Provisions for losses on loans, equity investments and guarantees Level of provisions for losses on loans and equity investments and, beginning in FY01, on guarantees Noninterest income and expense Level of technical assistance and advisory services provided by the Corporation to its clients, the level of income from the staff retirement and other benefits plans, and the approved administrative and other budgets Net income: Net gains (losses) on other financial instruments Principally, differences between changes in fair values of derivative instruments and changes in fair value of hedged items in fair value hedging relationships The following paragraphs detail significant variances between FY04 and FY03, and FY03 and FY02, covering the periods included in the Corporation's FY04 financial statements. As disclosed in Note A to the Corporation's FY04 financial statements, certain amounts in FY03 and FY02 have been reclassified to conform to the current year's presentation. Such reclassifications had no effect on operating income, net income or total assets. FY04 versus FY03 Operating income The Corporation's operating income for FY04 was $982 million, a second consecutive record year, following FY03's then record operating income of $528 million. The improvement was mainly attributable to significant equity income and an overall improvement in the quality of the loan and equity investment portfolio, as measured by portfolio impairment and portfolio risk levels, principally due to a reduction in the aggregate risk level within the portfolio resulting from: (i) the successful restructuring or rescheduling or problem projects; (ii) the growth in the outstanding portfolio in disbursements with better risk ratings; (iii) the write-off of investments with worse risk ratings than the average risk rating of the portfolio; and (iv) an overall improvement in country risk ratings. This improvement began during the latter stages of FY03 and continued into FY04 and resulted in a release of provisions for losses on loans, equity investments and guarantees. The Corporation's liquid asset portfolios yielded a positive contribution to the Corporation's operating income although at a lower level than in FY03 mainly due to the overall higher interest rate environment during FY04, with a significant rising interest rate environment during the fourth quarter of FY04. The Corporation has a significant holding of fixed income securities, principally in its P2 portfolio, that decline in value in a rising interest rate environment. A more detailed analysis of the components of IFC's operating income follows: Net interest income IFC's primary interest earning assets are its loan portfolio and its liquid assets portfolios. After charges on borrowings are taken into account, net interest income increased by $86 million or 15% from $569 million in FY03 to $655 million in FY04. Interest and financial fees from loans (including guarantee fees) for FY04 were $518 million, compared with $477 million in FY03, an increase of $41 million, or 9%. Interest income increased from $414 million in FY03 to $444 million in FY04, principally reflecting the overall increase in average interest rates during FY04, when compared with FY03. The growth in the loan portfolio and the overall increase in average interest rates during FY04, when compared with FY03, contributed $7 million, net of interest expense on lending- related swaps, of the increase in interest income. Recoveries of interest on loans being removed from non-accrual status, net of reversals of income on loans being placed in nonaccrual status, were $39 million in FY04 ($23 million ­ FY03). Income from the Corporation's participation notes, over and above minimum contractual interest, totaled $40 million in FY04 ($33 million ­ FY03). Commitment and financial fees also grew from $63 million in FY03 to $74 million in FY04 reflecting strong commitments and disbursements. Interest income from time deposits and securities are discussed below, as a component of liquid asset income. 18 IFC 2004 ANNUAL REPORT The Corporation's charges on borrowings decreased by $85 million, from $226 million in FY03 to $141 million in FY04, largely reflecting the declining US dollar interest rate environment in late FY03 and early FY04. As the Corporation's borrowings generally reprice every six months, the effect of the significant rise in the interest rate environment in the fourth quarter of FY04 has not yet had a significant impact on charges on borrowings. The weighted average cost of the Corporation's borrowings outstanding from market sources, after the effects of borrowing-related derivatives, rose slightly during the year from 0.9% at June 30, 2003 to 1.0% at June 30, 2004. The borrowings portfolio, net of borrowing-related derivatives and before the effects of SFAS No. 133, increased by $0.5 billion in FY04 from $15.9 billion at June 30, 2003, to $16.4 billion at June 30, 2004. Liquid asset income Liquid asset income comprises interest from time deposits and securities, net gains and losses on trading activities, and a small currency translation effect. The liquid assets portfolio, net of derivatives and securities lending activities, increased marginally from $13.0 billion at June 30, 2003, to $13.1 billion at June 30, 2004. The overall rising interest rate environment experienced during FY04, concentrated in the fourth quarter, resulted in a negative impact on the carrying value of the Corporation's fixed income liquid asset investments and, accordingly, lower total returns. Liquid asset returns totaled $177 million in FY04, reported as interest income from time deposits and securities ($278 million), net losses on trading activities ($104 million) and currency translation gains ($3 million) in the Corporation's FY04 income statement. Liquid asset returns totaled $475 million in FY03, reported as interest income from time deposits and securities ($318 million), and net gains on trading activities ($157 million). Income from equity investments Overall income from the equity investment portfolio increased by $389 million from $195 million in FY03 to $584 million in FY04. The Corporation generated realized capital gains on equity sales for FY04 of $381 million, as compared with $52 million for FY03, an increase of $329 million. Realized capital gains on equity sales in FY04 were highly concentrated, with $193 million of the total capital gains resulting from sales or partial sales of single equity investments in each of the Czech Republic, the Republic of Korea, and Mexico. IFC took advantage of buoyant markets to take some limited gains in investments where IFC's developmental role was complete, where pre-determined sales trigger levels had been met, and where markets had valued them adequately. Such opportunities did not occur in FY03 with only one sale of an equity investment generating a capital gain in excess of $5 million. Dividend income was also significantly higher in FY04 at $207 million, as compared with $147 million in FY03. Consistent with FY03, a significant amount of IFC's dividend income in FY04 was due in part to returns on the Corporation's joint ventures in the oil, gas and mining sectors, which totaled $65 million in FY04, as compared with $61 million in FY03. Release of provisions for losses on loans, equity investments and guarantees As noted above, the quality of the Corporation's investment portfolio improved during FY04, continuing the trend noted in the last nine months of FY03. As a result, IFC recorded a release of provisions for losses on loans, equity investments and guarantees of $177 million in FY04, including a release of $14 million in respect of guarantees, a significant improvement over FY03 when the Corporation recorded a charge of $98 million (which included a charge of $1 million in respect of guarantees). On June 30, 2004, the Corporation's total reserves against losses on loans and equity investments were 16.5% of the disbursed and outstanding portfolio (21.9% at June 30, 2003). Noninterest income Noninterest income of $82 million for FY04 was $11 million lower than in FY03 ($93 million), principally due to lower service fees - $41 million in FY04, as compared with $51 million in FY03. FY03 service fees included the recovery of $11 million of overdue interest and penalties received from one of the Corporation's client risk management derivatives to a client in the power sector which did not recur in FY04. Noninterest expense Administrative expenses (the principal component of noninterest expense) increased by 8% from $332 million in FY03 to $360 million in FY04. Administrative expenses include the grossing-up effect of certain revenues and expenses attributable to the Corporation's reimbursable program and jeopardy projects ($34 million in FY04, as compared with $30 million in FY03). The Corporation recorded expense from pension and other postretirement benefit plans in FY04 of $19 million, as compared with $24 million in FY03. Net income As more fully disclosed in Notes A, N and O to the Corporation's FY04 financial statements, the Corporation has designated certain hedging relationships in its borrowing activities and its lending activities as fair value hedges. The Corporation generally matches the terms of its derivatives with the terms of the specific underlying financial instruments hedged, in terms of currencies, maturity dates, reset dates, interest rates, and other features. However, differing valuation methodologies are applied to the derivative and the hedged IFC 2004 ANNUAL REPORT 19 - 20 - financial instrument, as prescribed by SFAS No. 133. The resulting ineffectiveness calculated for such relationships is recorded in net gains (losses) on other financial instruments, in net income. The effects of SFAS No. 133 on net income FY04 and FY03 can be summarized as follows (US$ millions): FY04 FY03 Operating income 982 528 SFAS No. 133 adjustments: Net gains (losses) on other financial instruments 11 (41) Net income 993 487 Net gains (losses) on financial instruments largely comprises the difference between the change in fair value of derivative instruments gains (losses) on other financial instruments largely comprises the difference between the change in fair value of derivative and the change in fair value of the hedged item under designated hedging relationships. instruments and the change in fair value of the hedged item under designated hedging relationships. FY03 versus FY02 Operating income The Corporation's operating income for FY03 was $528 million, substantially higher than FY02 operating income of $161 million. The improvement was mainly attributable to the significant reduction in the charge for provisions for losses on loans, equity investments and guarantees (provisions) and significantly higher net gains on the Corporation's liquid asset trading activities. Offsetting these favorable contributions to higher operating income in FY03, as compared with FY02, were lower realized capital gains on equity sales and higher expense from the Corporation's pension and other postretirement benefit plans (pension expense). The lower charge for provisions reflected the stabilization and subsequent marginal improvement in the loan and equity investment portfolio quality in FY03. Provisions in FY02 reflected the declining portfolio quality, principally in Argentina, one of the Corporation's largest portfolio countries. Provisions totaled $98 million in FY03, as compared with $657 million in FY02. The overall declining interest rate environment in FY03 continued to benefit the Corporation's returns from its liquid asset portfolios, in particular the P2 portfolio which is a largely fixed income portfolio. Gains on the Corporation's liquid asset trading activities in FY03 were $157 million, as compared to $31 million in FY02. Realized capital gains in FY03 were $52 million, as compared with $288 million in FY02. The significant gains in FY02 were principally due to targeted sales of a small number of equity investments in certain emerging markets that had reached pre-determined sales trigger levels. Pension expense in FY03 was $24 million, as compared with pension income in FY02 of $31 million. Net interest income IFC's primary interest earning assets are its loan portfolio and its liquid assets portfolios. After charges on borrowings are taken into account, net interest income decreased by $33 million or 6% from $602 million in FY02 to $569 million in FY03. Interest, commitment and financial fees from loans (including guarantee fees) for FY03 were $477 million, compared with $547 million in FY02, a decrease of 13%. Interest income declined from $486 million in FY02 to $414 million in FY03, principally reflecting the overall decline in interest rates during FY03. While the disbursed and outstanding loan portfolio grew by 15%, loans in nonaccrual status grew from $1,217 million at June 30, 2002 to $1,543 million at June 30, 2003, an increase of 27%. Recoveries of interest on loans being removed from non-accrual status, net of reversals of income on loans being placed in nonaccrual status were $23 million in FY03 ($27 million ­ FY02). Income from the Corporation's participation notes, over and above minimum contractual interest, totaled $33 million in FY03 ($22 million ­ FY02). In addition, as discussed in Note E to the FY03 financial statements, the Corporation recorded nonrecurring income of $15 million in FY02, included in interest and financial fees from loans, as a result of exercising an option to reacquire the remaining outstanding loan participations owned by a trust, and the subsequent dissolution of the trust. Commitment and financial fees, however, grew from $61 million in FY02 to $64 million in FY03 reflecting the Corporation's strong commitments and disbursements in FY03. Interest income from time deposits and securities for FY03 was $318 million, $175 million lower than the $493 million recorded in FY02. The liquid assets portfolio, net of derivatives and securities lending activities, decreased from $14.5 billion at June 30, 2002, to $13.0 billion at June 30, 2003 largely due to loan and equity disbursements and sales of equity securities exceeding repayments and redemptions by $1.3 billion and repayments of the Corporation's borrowings exceeding drawdowns by $0.3 billion. The $1.5 billion decline in the liquid assets portfolio combined with the reduced yields due to the overall declining interest rate environment contributed to the reduction in interest income from time deposits and securities from FY02 to FY03. 20 IFC 2004 ANNUAL REPORT - 21 - The Corporation's charges on borrowings decreased by $212 million from $438 million in FY02 to $226 million in FY03, largely reflecting the declining US dollar interest rate environment, as the weighted average cost of the Corporation's borrowings outstanding from market sources, after the effects of borrowing-related derivatives fell from 1.8% at June 30, 2002 to 0.9% at June 30, 2003. The borrowings portfolio, net of borrowing-related derivatives, decreased by $0.8 billion in FY03 from $16.7 billion at June 30, 2002, to $15.9 billion at June 30, 2003. Net gains and losses on trading activities Due to the continuing overall decline in the US dollar interest rate environment throughout FY03, and the favorable impact of this decline on the carrying value of the Corporation's fixed income liquid asset investments, the Corporation recorded net realized and unrealized gains on its liquid asset portfolios of $157 million, higher than the net realized and unrealized gains of $31 million recorded in FY02. Income from equity investments Overall income from the equity investment portfolio declined by $233 million from $428 million in FY02 to $195 million in FY03. The Corporation generated realized capital gains for FY03 of $52 million as compared with $288 million for FY02, a decrease of $236 million or 82%. Capital gains in FY02 were highly concentrated with $227 million of the total capital gains of $288 million resulting from sales or partial sales of six equity investments in Korea, Mexico, Peru, and Latvia. Such opportunities for sales based on pre- determined trigger levels did not recur to a significant extent in FY03 with only one sale of an equity investment generating a capital gain in excess of $5 million. Dividend income was marginally higher in FY03 at $143 million, as compared with $140 million in FY02. Consistent with FY02, the stable performance in dividend income in FY03 was largely attributable to returns on the Corporation's joint ventures in the oil, gas and mining sectors. Provisions for losses on loans, equity investments and guarantees The income charge for provisions for losses of $98 million in FY03, including $1 million in respect of guarantees, was significantly lower than the charge in FY02 of $657 million (which included $16 million in respect of guarantees), a decline of $559 million. On June 30, 2003, the Corporation's total reserves against losses on loans and equity investments were 21.9% of the disbursed and outstanding portfolio (25.8% at June 30, 2002). The significantly lower income charge in FY03 reflected the stabilization of the portfolio quality in the first quarter of FY03 and a marginal improvement in portfolio quality during the last nine months of the year. Noninterest income Noninterest income of $93 million for FY03 was $11 million higher than in FY02 ($82 million), principally due to higher service fees - $51 million in FY03, as compared with $40 million in FY02. The increase was largely due to the recovery of $11 million of overdue interest and penalties received from one of the Corporation's client risk management derivatives to a client in the power sector. Noninterest expense Administrative expenses (the principal component of noninterest expense) marginally increased by 2% from $327 million in FY02 to Administrative expenses (the principal component of noninterest expense) marginally increased by 2% from $327 million in $332 million in FY03. Administrative expenses include the grossing-up effect of certain revenues and expenses attributable to the FY02 to $332 million in FY03. Administrative expenses include the grossing-up effect of certain revenues and expenses Corporation's reimbursable program ($30 million in FY03, as compared with $39 million in FY02), and the impact of a reorganization attributable to the Corporation's reimbursable program and jeopardy projects ($30 million in FY03, as compared with $39 million effected in FY02 ($nil million in FY03, as compared with $13 million in FY02). in FY02), and the impact of a reorganization effected in FY02 ($nil million in FY03, as compared with $13 million in FY02). FY02 administrative expenses were impacted by a series of efficiency and effectiveness measures implemented in the second half of FY02. These measures were taken as part of IFC's overall reorganization and also to address the impact on operating income of the emerging crisis in Argentina. Administrative expenses in FY02 included a charge of $13 million for the reorganization, which involved staff reductions, field office closings and reorganizations, and a headquarters reorganization. The reorganization was finalized and announced in the fourth quarter of FY02, and the implementation of the plan was substantially completed in FY03. The Corporation recorded expense from pension and other postretirement benefit plans in FY03 of $24 million, as compared with income of $31 million in FY02. The increase in expense was due to changes in the underlying actuarial assumptions related to the calculation of pension expense, and a decrease in the value of the pension assets during FY02. Net income As more fully disclosed in Notes A, L and M to the Corporation's FY03 financial statements, the Corporation changed its method of accounting for derivative instruments to conform with SFAS No. 133 beginning in FY01. Pursuant to SFAS No. 133, the Corporation has designated certain hedging relationships in its borrowing activities and its lending activities as fair value hedges. The Corporation generally matches the terms of its derivatives with the terms of the specific underlying financial instruments hedged, in terms of currencies, maturity dates, reset dates, interest rates, and other features. However, differing valuation methodologies are applied to the derivative and the hedged financial instrument, as prescribed by SFAS No. 133. The resulting ineffectiveness calculated for such relationships is recorded in net gains (losses) on other financial instruments in net income. IFC 2004 ANNUAL REPORT 21 - 22 - The effects of SFAS No. 133 on net income FY03 and FY02 can be summarized as follows (US$ millions): FY03 FY02 Operating income 528 161 SFAS No. 133 adjustments: Net gains (losses) on other financial instruments (41) 54 Net income 487 215 Net gains (losses) on other financial instruments largely comprises the difference between the change in fair value of derivative instruments and the change in fair value of the hedged item under designated hedging relationships. VIII. GOVERNANCE Board of Directors In accordance with its Articles of Agreement, members of IFC's Board of Directors (the Board) are appointed or elected by their member governments. These Directors are neither officers nor staff of IFC. James D. Wolfensohn, President, is the only management member of the Board, serving as a non-voting member and as Chairman of the Board. The Board has established several Committees including: N Committee on Development Effectiveness N Audit Committee N Budget Committee N Personnel Committee N Committee on Governance and Administrative Matters The Board and its Committees function in continuous session at the principal offices of the World Bank Group, as business requires. Each Committee's terms of reference establish its respective roles and responsibilities. As Committees do not vote, their role is primarily to serve the full Board in discharging its responsibilities. Audit Committee Membership The Audit Committee consists of eight members of the Board. All members are independent from Management. Membership on the Committee is determined by the Board, based upon nominations by the Chairman of the Board, following informal consultation with the Directors. Membership of the Committee is expected to reflect the economic and geographic diversity of IFC's member countries, as well as the seniority, and relevant experience of each member. Generally, Committee members are appointed for a two year term; reappointment to a second term, when possible, is desirable for continuity. Audit Committee meetings are generally open to any members of the Board who may wish to attend, and non-Committee members of the Board may participate in discussions. In addition, the Chairman of the Audit Committee may speak in that capacity at meetings of the Board with respect to discussions held in the Audit Committee. Key responsibilities The Audit Committee is appointed by the Board to exercise, on its behalf, oversight and assessment of the effectiveness of financial policies, the integrity of the financial statements, the system of internal controls regarding finance, accounting and ethics, fiduciary controls, such as procurement and financial management, financial, and operational risk. The Audit Committee also has responsibility for the appointment, qualifications, independence and performance of the external auditor, as well as the internal audit function. Oversight of the internal audit function includes reviewing the charter, operations, organizational structure and responsibilities of the function as well as the effectiveness of internal audit, and the annual internal audit plan. In the execution of this role, the Committee discusses with management, the external auditors, and the internal auditors, financial issues and policies which have a bearing on the Corporation's financial position and risk-bearing capacity. The Audit Committee also monitors the evolution of developments in corporate governance and the role of audit committees on an ongoing basis and in FY04 revised its terms of reference. Communications The Audit Committee communicates regularly with the Board through distribution of the following: N The minutes of its meetings N Reports of the Audit Committee prepared by the Chairman, which document discussions held. These Reports are distributed to the Directors, Alternates, World Bank Group Senior Management and Vice Presidents of IFC. N "Statement(s) of the Chairman" and statements issued by other members of the Committee. N The Annual Report of the Board, which provides an overview of the main issues addressed by the Audit Committee over the year. 22 IFC 2004 ANNUAL REPORT - 23 - The Audit Committee's communications with the external auditor are described in the Auditor Independence section, below. Executive sessions Members of the Audit Committee may convene in executive session at any time, without management present. Under the Audit Committee's terms of reference, it meets separately in executive session with the external and internal auditors. Access to outside resources and to management The Audit Committee has the capacity, under exceptional circumstances, to obtain advice and assistance from outside legal, accounting or other advisors as deemed appropriate. Appropriate funding shall be made available by the Board of Directors. Throughout the year, the Audit Committee receives a large volume of information, that supports the preparation of the financial statements. The Audit Committee meets both formally and informally throughout the year to discuss financial and accounting matters. Directors have complete access to management of the Corporation. The Audit Committee reviews and discusses with management the quarterly and annual financial statements. The Committee also reviews with the external auditor the financial statements prior to their publication and recommends them for approval to the Board of Directors. Code of Ethics The World Bank Group strives to foster and maintain a positive work environment that supports the ethical behavior of its staff. To facilitate this effort, the Bank Group has in place a Code of Professional Ethics ­ Living our Values. The Code applies to all staff (including managers, consultants, and temporary employees) worldwide. The Code is available on the Bank Group's website, www.worldbank.org. Staff relations, conflicts of interest, and operational issues, including the accuracy of books and records, are key elements of the Code. In addition to the Code, an essential element of appropriate conduct is compliance with the obligations embodied in the Principles of Staff Employment, Staff Rules, and Administrative Rules, the violation of which may result in disciplinary actions. In accordance with the Staff Rules, senior managers must complete a confidential financial disclosure instrument with the Office of Ethics and Business Conduct. Guidance for staff is also provided through programs, training materials, and other resources. Managers are responsible for ensuring that internal systems, policies, and procedures are consistently aligned with the World Bank Group's ethical goals. In support of its efforts on ethics, the World Bank offers a variety of methods for informing staff of these resources. Many of these efforts are headed by the following groups: N The Office of Ethics and Business Conduct provides leadership, management and oversight for the Bank Group's ethics infrastructure including the Ethics HelpLine, a consolidated conflicts of interest disclosure/resolution system, financial disclosure, ongoing training to both internal and external audiences, and communication resources. N The Department of Institutional Integrity is charged with investigating allegations of fraud and corruption with the Bank Group. The Department also investigates allegations of misconduct by Bank Group staff, and trains and educates staff and clients in detecting and reporting fraud and corruption in Bank Group-funded projects. The Department reports directly to the President and is composed of professionals from a range of disciplines including financial analysts, researchers, investigators, lawyers, prosecutors, forensic accountants, and Bank Group staff with operational experience. The Bank Group has in place procedures for the receipt, retention and treatment of complaints received regarding accounting, internal controls and auditing. The Internal Audit Department would lead a review into complaints pertaining to accounting, internal controls and auditing and coordinate its findings with the Department of Institutional Integrity. Similarly, if the specific nature of the allegation involves fraud, corruption, or other forms of misconduct, the Department of Institutional Integrity would lead an investigation into such matters and coordinate its findings with the Internal Audit Department. The Bank Group offers both an "Ethics HelpLine", as well as a Fraud and Corruption hotline run by an outside firm staffed by trained specialists. The third party service offers numerous methods of communication in addition to a toll free hotline in countries where access to telecommunications may be limited. In addition there are other methods by which the Department of Institutional Integrity may receive allegations, including directly by email, anonymously, or through confidential submission through their website, as well as the postal service and telephone. Auditor Independence In February 2003, the Board adopted a set of principles applicable to the appointment of the external auditor for IFC. Key features of those principles include: An immediate prohibition of the external auditor from the provision of all non audit-related services. N All audit-related services must be pre-approved on a case-by-case basis by the Board, upon recommendation of the Audit Committee. IFC 2004 ANNUAL REPORT 23 - 24 - N Mandatory rebidding of the external audit contract every five years. N Prohibition of any firm serving as external auditor for more than two consecutive five-year terms. N Mandatory rotation of the senior partner after five years. N An evaluation of the performance of the external auditor at the mid-point of the five year term. IFC's external auditor commenced a new term of up to five years in FY04, and will have served eleven years as external auditor upon completion of that term, pursuant to a one-time grandfathered exemption from the above-referenced ten-year limit. The service of the external auditors is subject to recommendation by the Audit Committee for annual reappointment and approval of a resolution by the Board. As a standard practice, the external auditor is present as an observer at virtually all Audit Committee meetings and is frequently asked to present its perspective on issues. In addition, the Audit Committee meets periodically with the external auditor in private session without management present. Members of the Audit Committee have independent access to the external auditor. Communication between the external auditor and the Audit Committee is ongoing, as frequently as is deemed necessary by either party. IFC's external auditors follow the communication requirements with audit committees set out under U.S. generally accepted auditing standards. In keeping with these standards, significant formal communications include: N quarterly and annual financial statement reporting, N annual appointment of the external auditors, N presentation of the external audit plan, N presentation of control recommendations and discussion of the COSO attestation and report, and N presentation of a statement regarding independence. In addition, there is informal communication between the Chairman of the Audit Committee and the external auditor's lead client service partner. 24 IFC 2004 ANNUAL REPORT - 25 - Responsibility for External Financial Reporting MANAGEMENT'S RESPONSIBILITY IFC 2004 ANNUAL REPORT 25 MANAGEMENT'S RESPONSIBILITY (continued) 26 IFC 2004 ANNUAL REPORT REPORT OF INDEPENDENT ACCOUNTANTS IFC 2004 ANNUAL REPORT 27 Financial Statements REPORT OF INDEPENDENT ACCOUNTANTS FINANCIAL STATEMENTS INCLUDING NOTES 28 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION BALANCE SHEET as of June 30, 2004 and June 30, 2003 (US$ millions) 2004 2003 Assets Due from banks ......................................................................................................................... $ 74 $ 93 Time deposits ............................................................................................................................ 2,387 2,293 Trading securities ­ Note B ...................................................................................................... 12,842 10,572 Securities purchased under resale agreements ....................................................................... 3,094 4,046 Loans and equity investments disbursed and outstanding ­ Note C Loans .................................................................................................................................... 9,753 9,242 Equity investments ................................................................................................................ 2,559 2,760 Total loans and equity investments ...................................................................................... 12,312 12,002 Less: Reserve against losses on loans and equity investments ...................................... (2,033) (2,625) Net loans and equity investments ................................................................................ 10,279 9,377 Derivative assets ....................................................................................................................... 1,092 1,734 Receivables and other assets ­ Note H ................................................................................... 2,593 3,428 Total assets ..................................................................................................................... $ 32,361 $ 31,543 Liabilities and capital Liabilities Securities sold under repurchase agreements and payable for cash collateral received ............................................................................................... $ 4,329 $ 3,053 Borrowings withdrawn and outstanding ­ Note I From market sources ....................................................................................................... 16,157 17,181 From International Bank for Reconstruction and Development ........................................ 97 134 Total borrowings ........................................................................................................... 16,254 17,315 Derivative liabilities ............................................................................................................... 1,549 1,264 Payables and other liabilities ­ Note J................................................................................... 2,447 3,122 Total liabilities ................................................................................................................... 24,579 24,754 Capital Capital stock, authorized 2,450,000 shares of $1,000 par value each ­ Note K Subscribed ........................................................................................................................ 2,362 2,362 Less: Portion not yet paid ................................................................................................ (1) (2) Total capital stock ........................................................................................................ 2,361 2,360 Payments received on account of pending subscriptions ..................................................... 1 - Accumulated other comprehensive income .......................................................................... 2 4 Retained earnings ................................................................................................................ 5,418 4,425 Total capital ...................................................................................................................... 7,782 6,789 Total liabilities and capital ............................................................................................. $ 32,361 $ 31,543 The notes to financial statements are an integral part of these statements. IFC 2004 ANNUAL REPORT 29 INTERNATIONAL FINANCE CORPORATION INCOME STATEMENT for the three years ended June 30, 2004 (US$ millions) 2004 2003 2002 Interest income Interest and financial fees from loans ­ Note C .......................................................$ 518 $ 477 $ 547 Interest from time deposits and securities ­ Note B ................................................ 278 318 493 Total interest income ......................................................................................... 796 795 1,040 Interest expense Charges on borrowings ­ Note I .............................................................................. 141 226 438 Total interest expense ....................................................................................... 141 226 438 Net interest income ................................................................................................ 655 569 602 Net (losses) gains on trading activities ­ Note B ......................................................... (104) 157 31 Income from equity investments ­ Note E .................................................................... 584 195 428 Release of (provision for) losses on loans, equity investments and guarantees ­ Note C ....................................................................................................................... 177 (98) (657) Net income from loans, equity investments and trading activities ....................... 1,312 823 404 Noninterest income Service fees ............................................................................................................. 41 51 40 Translation adjustments, net .................................................................................... 7 8 (1) Other income ­ Note L ............................................................................................. 34 34 43 Total noninterest income .................................................................................. 82 93 82 Noninterest expense Administrative expenses ­ Notes S and T ............................................................... 360 332 327 Expense (income) from pension and other postretirement benefit plans ­ Note R . 19 24 (31) Contributions to special programs ­ Note M ............................................................ 29 28 22 Other expenses ........................................................................................................ 4 4 7 Total noninterest expense ................................................................................ 412 388 325 Operating income ....................................................................................................... 982 528 161 Net gains (losses) on other financial instruments ­ Note N ......................................... 11 (41) 54 Net income...................................................................................................................$ 993 $ 487 $ 215 The notes to financial statements are an integral part of these statements. 30 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION STATEMENT OF COMPREHENSIVE INCOME for the three years ended June 30, 2004 (US$ millions) 2004 2003 2002 Net income ..................................................................................................................$ 993 $ 487 $ 215 Other comprehensive (loss) income Reclassification to net income of net interest accruals on swaps in cash flow hedging relationships at June 30, 2000 ............................................... (2) (2) (6) Total comprehensive income ...........................................................................$ 991 $ 485 $ 209 STATEMENT OF CHANGES IN CAPITAL for the three years ended June 30, 2004 (US$ millions) Retained earnings Designated Payments for technical Accumulated on account assistance other received and advisory comprehensive Capital of pending Undesignated services Total income stock subscriptions Total capital At July 1, 2001 ................ ...................$ 3,723 $ - $ 3,723 $ 12 $ 2,360 $ - $ 6,095 Year ended June 30, 2002 Net income ................................... 215 215 215 Other comprehensive income (loss)... (6) (6) At June 30, 2002 ..............................$ 3,938 $ - $ 3,938 $ 6 $ 2,360 $ - $ 6,304 Year ended June 30, 2003 Net income ................................... 487 487 487 Other comprehensive income (loss) ... (2) (2) At June 30, 2003 ..............................$ 4,425 $ - $ 4,425 $ 4 $ 2,360 $ - $ 6,789 Year ended June 30, 2004 Net income ................................... 993 993 993 Other comprehensive income (loss) ... (2) (2) Designations for technical assistance and advisory services - Note K....... (225) 225 - - Payments received on account of pending subscriptions................ 1 1 Payments received for capital stock subscribed................ 1 1 At June 30, 2004 ..............................$ 5,193 $ 225 $ 5,418 $ 2 $ 2,361 $ 1 $ 7,782 The notes to financial statements are an integral part of these statements. IFC 2004 ANNUAL REPORT 31 INTERNATIONAL FINANCE CORPORATION STATEMENT OF CASH FLOWS for the three years ended June 30, 2004 (US$ millions) 2004 2003 2002 Cash flows from loans and equity investment activities Loan disbursements .................................................................................................$ (2,684) $ (2,646) $ (1,250) Equity disbursements ............................................................................................... (468) (313) (285) Loan repayments ..................................................................................................... 1,935 1,402 1,350 Equity redemptions .................................................................................................. 4 5 23 Sales of loans and equity investments ..................................................................... 975 271 638 Net cash (used in) provided by investing activities ....................................... (238) (1,281) 476 Cash flows from financing activities Drawdown of borrowings ......................................................................................... 3,047 3,526 4,000 Repayment of borrowings ........................................................................................ (3,136) (3,796) (3,109) Capital subscriptions................................................................................................. 1 Net cash (used in) provided by financing activities ....................................... (88) (270) 891 Cash flows from operating activities Net income ............................................................................................................... 993 487 215 Adjustments to reconcile net income to net cash provided by operating activities: Realized capital gains on equity sales ................................................................. (381) (52) (288) (Release of) provision for losses on loans, equity investments and guarantees . (177) 98 657 Translation adjustments, net ............................................................................... (7) (8) 1 Net (gains) losses on other financial instruments ................................................ (11) 41 (54) Change in accrued income on loans, time deposits and securities ..................... (228) (278) 41 Change in payables and other liabilities .............................................................. (330) 1,917 (810) Change in receivables and other assets ............................................................. 412 (4,322) 317 Net cash provided by (used in) operating activities ...................................... 271 (2,117) 79 Change in cash and cash equivalents ......................................................................... (55) (3,668) 1,446 Effect of exchange rate changes on cash and cash equivalents ................................. 2,400 265 334 Net change in cash and cash equivalents ................................................................... 2,345 (3,403) 1,780 Beginning cash and cash equivalents .......................................................................... 12,958 16,361 14,581 Ending cash and cash equivalents ..........................................................................$ 15,303 $ 12,958 $ 16,361 Composition of cash and cash equivalents Due from banks ........................................................................................................$ 74 $ 93 $ 95 Time deposits ........................................................................................................... 2,387 2,293 4,471 Securities held in trading portfolio ............................................................................ 12,842 10,572 11,795 Total cash and cash equivalents .....................................................................$ 15,303 $ 12,958 $ 16,361 Supplemental disclosure Change in ending balances resulting from exchange rate fluctuations: Loans outstanding ...............................................................................................$ 83 $ 145 $ 92 Borrowings ........................................................................................................... (765) (473) (585) The notes to financial statements are an integral part of these statements. 32 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION STATEMENT OF CAPITAL STOCK AND VOTING POWER as of June 30, 2004 (US$ thousands) Capital stock Voting power Capital stock Voting power Amount Percent Number Percent Amount Percent Number Percent Members paid of total of votes of total Members paid of total of votes of total Afghanistan .......................$ 111 * 361 0.02 Latvia ................................ $ 2,150 0.09 2,400 0.10 Albania .............................. 1,302 0.06 1,552 0.06 Lebanon ............................ 135 0.01 385 0.02 Algeria ............................... 5,621 0.24 5,871 0.24 Lesotho ............................. 71 * 321 0.01 Angola ............................... 1,481 0.06 1,731 0.07 Liberia ............................... 83 * 333 0.01 Antigua and Barbuda ......... 13 * 263 0.01 Libya ................................. 55 * 305 0.01 Argentina ........................... 38,129 1.61 38,379 1.60 Lithuania ........................... 2,341 0.10 2,591 0.11 Armenia ............................. 992 0.04 1,242 0.05 Luxembourg ...................... 2,139 0.09 2,389 0.10 Australia ............................ 47,329 2.00 47,579 1.98 Macedonia, FYR of ........... 536 0.02 786 0.03 Austria ............................... 19,741 0.84 19,991 0.83 Madagascar ...................... 432 0.02 682 0.03 Azerbaijan ......................... 2,367 0.10 2,617 0.11 Malawi .............................. 1,822 0.08 2,072 0.09 Bahamas, The ................... 335 0.01 585 0.02 Malaysia ........................... 15,222 0.64 15,472 0.64 Bahrain .............................. 1,746 0.07 1,996 0.08 Maldives ........................... 16 * 266 0.01 Bangladesh ....................... 9,037 0.38 9,287 0.39 Mali ................................... 451 0.02 701 0.03 Barbados ........................... 361 0.02 611 0.03 Marshall Islands ................ 663 0.03 913 0.04 Belarus .............................. 5,162 0.22 5,412 0.23 Mauritania ......................... 214 0.01 464 0.02 Belgium ............................. 50,610 2.14 50,860 2.11 Mauritius ........................... 1,665 0.07 1,915 0.08 Belize ................................. 101 * 351 0.01 Mexico .............................. 27,589 1.17 27,839 1.16 Benin ................................. 119 0.01 369 0.02 Micronesia, Fed. States of. 744 0.03 994 0.04 Bhutan................................ 720 0.03 970 0.04 Moldova ............................ 784 0.03 1,034 0.04 Bolivia ................................ 1,902 0.08 2,152 0.09 Mongolia ........................... 144 0.01 394 0.02 Bosnia and Herzegovina ... 620 0.03 870 0.04 Morocco ............................ 9,037 0.38 9,287 0.39 Botswana ........................... 113 * 363 0.02 Mozambique ..................... 322 0.01 572 0.02 Brazil ................................. 39,479 1.67 39,729 1.65 Myanmar ........................... 666 0.03 916 0.04 Bulgaria ............................. 4,867 0.21 5,117 0.21 Namibia ............................ 404 0.02 654 0.03 Burkina Faso ..................... 836 0.04 1,086 0.05 Nepal ................................ 822 0.03 1,072 0.04 Burundi .............................. 100 * 350 0.01 Netherlands ...................... 56,131 2.38 56,381 2.34 Cambodia .......................... 339 0.01 589 0.02 New Zealand .................... 3,583 0.15 3,833 0.16 Cameroon .......................... 885 0.04 1,135 0.05 Nicaragua ......................... 715 0.03 965 0.04 Canada .............................. 81,342 3.44 81,592 3.39 Niger ................................. 147 0.01 397 0.02 Cape Verde ....................... 15 * 265 0.01 Nigeria .............................. 21,643 0.92 21,893 0.91 Central African Republic .... 119 0.01 369 0.02 Norway ............................. 17,599 0.75 17,849 0.74 Chad................................... 1,364 0.06 1,614 0.07 Oman ................................ 1,187 0.05 1,437 0.06 Chile .................................. 11,710 0.50 11,960 0.50 Pakistan ............................ 19,380 0.82 19,630 0.82 China ................................. 24,500 1.04 24,750 1.03 Palau ................................ 25 * 275 0.01 Colombia ........................... 12,606 0.53 12,856 0.53 Panama ............................ 1,007 0.04 1,257 0.05 Comoros ............................ 14 * 264 0.01 Papua New Guinea .......... 1,147 0.05 1,397 0.06 Congo, Dem. Rep. of ..... 2,159 0.09 2,409 0.10 Paraguay .......................... 436 0.02 686 0.03 Congo, Republic of ............ 131 0.01 381 0.02 Peru .................................. 6,898 0.29 7,148 0.30 Costa Rica ......................... 952 0.04 1,202 0.05 Philippines ........................ 12,606 0.53 12,856 0.53 Côte d'Ivoire ...................... 3,544 0.15 3,794 0.16 Poland .............................. 7,236 0.31 7,486 0.31 Croatia ............................... 2,882 0.12 3,132 0.13 Portugal ............................ 8,324 0.35 8,574 0.36 Cyprus ............................... 2,139 0.09 2,389 0.10 Romania ........................... 2,661 0.11 2,911 0.12 Czech Republic ................. 8,913 0.38 9,163 0.38 Russian Federation .......... 81,342 3.44 81,592 3.39 Denmark ............................ 18,554 0.79 18,804 0.78 Rwanda ............................ 306 0.01 556 0.02 Djibouti .............................. 21 * 271 0.01 Saint Kitts and Nevis ........ 638 0.03 888 0.04 Dominica ........................... 42 * 292 0.01 St. Lucia ............................ 74 * 324 0.01 Dominican Republic .......... 1,187 0.05 1,437 0.06 Samoa .............................. 35 * 285 0.01 Ecuador ............................. 2,161 0.09 2,411 0.10 Saudi Arabia ..................... 30,062 1.27 30,312 1.26 Egypt, Arab Republic of ..... 12,360 0.52 12,610 0.52 Senegal ............................ 2,299 0.10 2,549 0.11 El Salvador ........................ 29 * 279 0.01 Serbia and Montenegro..... 1,803 0.08 2,053 0.09 Equatorial Guinea .............. 43 * 293 0.01 Seychelles ........................ 27 * 277 0.01 Eritrea ................................ 935 0.04 1,185 0.05 Sierra Leone ..................... 223 0.01 473 0.02 Estonia .............................. 1,434 0.06 1,684 0.07 Singapore ......................... 177 0.01 427 0.02 Ethiopia ............................. 127 0.01 377 0.02 Slovak Republic ................ 4,457 0.19 4,707 0.20 Fiji ...................................... 287 0.01 537 0.02 Slovenia ............................ 1,585 0.07 1,835 0.08 Finland ............................... 15,697 0.66 15,947 0.66 Solomon Islands ............... 37 * 287 0.01 France ............................. 121,015 5.12 121,265 5.04 Somalia ............................. 83 * 333 0.01 Gabon ................................ 1,268 0.05 1,518 0.06 South Africa ...................... 15,948 0.68 16,198 0.67 Gambia, The ...................... 94 * 344 0.01 Spain ................................ 37,026 1.57 37,276 1.55 Georgia .............................. 861 0.04 1,111 0.05 Sri Lanka .......................... 7,135 0.30 7,385 0.31 Germany .......................... 128,908 5.46 129,158 5.37 Sudan ............................... 111 * 361 0.02 Ghana ................................ 5,071 0.21 5,321 0.22 Swaziland ......................... 684 0.03 934 0.04 Greece ............................... 6,898 0.29 7,148 0.30 Sweden ............................. 26,876 1.14 27,126 1.13 Grenada ............................ 74 * 324 0.01 Switzerland ....................... 41,580 1.76 41,830 1.74 Guatemala ......................... 1,084 0.05 1,334 0.06 Syrian Arab Republic ........ 194 0.01 444 0.02 Guinea ............................... 339 0.01 589 0.02 Tajikistan .......................... 1,212 0.05 1,462 0.06 Guinea-Bissau ................... 18 * 268 0.01 Tanzania ........................... 1,003 0.04 1,253 0.05 Guyana .............................. 1,392 0.06 1,642 0.07 Thailand ............................ 10,941 0.46 11,191 0.47 Haiti ................................... 822 0.03 1,072 0.04 Togo ................................. 808 0.03 1,058 0.04 Honduras ........................... 495 0.02 745 0.03 Tonga ............................... 34 * 284 0.01 Hungary ............................. 10,932 0.46 11,182 0.46 Trinidad and Tobago ........ 4,112 0.17 4,362 0.18 Iceland ............................... 42 * 292 0.01 Tunisia .............................. 3,566 0.15 3,816 0.16 India ................................... 81,342 3.44 81,592 3.39 Turkey ............................... 14,545 0.62 14,795 0.62 Indonesia ........................... 28,539 1.21 28,789 1.20 Turkmenistan .................... 810 0.03 1,060 0.04 Iran, Islamic Republic of .... 1,444 0.06 1,694 0.07 Uganda ............................. 735 0.03 985 0.04 Iraq .................................... 147 0.01 397 0.02 Ukraine ............................. 9,505 0.40 9,755 0.41 Ireland ............................... 1,290 0.05 1,540 0.06 United Arab Emirates ....... 4,033 0.17 4,283 0.18 Israel .................................. 2,135 0.09 2,385 0.10 United Kingdom ................ 121,015 5.12 121,265 5.04 Italy .................................... 81,342 3.44 81,592 3.39 United States .................... 569,379 24.11 569,629 23.68 Jamaica ............................. 4,282 0.18 4,532 0.19 Uruguay ............................ 3,569 0.15 3,819 0.16 Japan ............................... 141,174 5.98 141,424 5.88 Uzbekistan ........................ 3,873 0.16 4,123 0.17 Jordan ............................... 941 0.04 1,191 0.05 Vanuatu ............................ 55 * 305 0.01 Kazakhstan ........................ 4,637 0.20 4,887 0.20 Venezuela, Rep. Boliv. de 27,588 1.17 27,838 1.16 Kenya ................................ 4,041 0.17 4,291 0.18 Vietnam ............................ 446 0.02 696 0.03 Kiribati ............................... 12 * 262 0.01 Yemen, Republic of .......... 715 0.03 965 0.04 Korea, Republic of ............. 15,946 0.68 16,196 0.67 Zambia .............................. 1,286 0.05 1,536 0.06 Kuwait ................................ 9,947 0.42 10,197 0.42 Zimbabwe ......................... 2,120 0.09 2,370 0.10 Kyrgyz Republic ................ 1,720 0.07 1,970 0.08 Lao People's Dem. Rep. ... 278 0.01 528 0.02 Total June 30, 2004 $ 2,361,499 100.00+ 2,405,499 100.00+ Total June 30, 2003 $ 2,360,181 100.00+ 2,403,931 100.00+ * Less than .005 percent. +May differ from the sum of the individual percentages shown because of rounding. The notes to financial statements are an integral part of these statements. IFC 2004 ANNUAL REPORT 33 34 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS investments undertaken on a quarterly basis. The Corporation considers a loan as impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the loan's contractual terms. A reserve against losses for an equity investment is established when a decrease in value of the equity investment has occurred which is considered other than temporary. Unidentified probable losses are the aggregate probable losses over a one-year risk horizon, in excess of identified probable losses. The risks inherent in the portfolio that are considered in determining unidentified probable losses are those proven to exist by past experience and include: country systemic risk; the risk of correlation or contagion of losses between markets; uninsured and uninsurable risks; nonperformance under guarantees and support agreements; and opacity of, or misrepresentation in, financial statements. Loan and Equity investments are written-off when the Corporation has exhausted all possible means of recovery, by reducing the reserve against losses on loans and equity investments. Such reductions in the reserve are offset by recoveries associated with previously written-off loans and equity investments. Revenue recognition on loans and equity investments - Interest income and commitment fees on loans are recorded as income on an accrual basis. All other fees are recorded as income when received in freely convertible currencies. The Corporation does not recognize income on loans where collectibility is in doubt or payments of interest or principal are past due more than 60 days unless management anticipates that collection of interest will occur in the near future. Any interest accrued on a loan placed in nonaccrual status is reversed out of income and is thereafter recognized as income only when the actual payment is received. Interest not previously recognized but capitalized as part of a debt restructuring is recorded as deferred income, included in the balance sheet in payables and other liabilities, and credited to income only when the related principal is received. Such capitalized interest is considered in the computation of the reserve against losses on loans and equity investments in the balance sheet. Dividends and profit participations are recorded as income when received in freely convertible currencies. Realized capital gains on the sale or redemption of equity investments are measured against the average cost of the investments sold and are recorded as income when received in freely convertible currencies. Certain equity investments, for which recovery of invested capital is uncertain, are accounted for under the cost recovery method, such that receipts of freely convertible currencies are first applied to recovery of invested capital and then to capital gains. The cost recovery method is principally applied to the Corporation's investment in its unincorporated oil and gas joint ventures. Guarantees ­ The Corporation extends financial guarantee facilities to its clients to provide credit enhancement for their debt securities and trade obligations. Beginning in the year ended June 30, 2001, the Corporation began offering partial credit guarantees to clients covering, on a risk-sharing basis, client obligations on bonds and/or loans. Under the terms of the Corporation's guarantees, the Corporation agrees to assume responsibility for the client's financial obligations in the event of default by the client (i.e., failure to pay when payment is due). Guarantees are regarded as issued when the Corporation commits to the guarantee. This date is also the "inception" of the guarantee contract. Guarantees are regarded as outstanding when the underlying financial obligation of the client is incurred, and called when the Corporation's obligation under the guarantee has been invoked. There are two liabilities associated with the guarantees: (1) the stand-ready obligation to perform and (2) the contingent liability. The stand-ready obligation to perform is recognized at the commitment date unless a contingent liability exists at that time or is expected to exist in the near term. The contingent liability associated with the financial guarantees is recognized when it is probable the guarantee will be called and when the amount of guarantee called can be reasonably estimated. All liabilities associated with guarantees are included in payables and other liabilities, and the receivables are included in other assets on the balance sheet. When the guarantees are called, the amount disbursed is recorded as a new loan, and specific reserves are established, based on the estimated probable loss. These reserves are included in the reserve against losses on loans and equity investments on the balance sheet. Commitment fees on guarantees are recorded as income on an accrual basis. Funding Mechanism for Technical Assistance and Advisory Services - In FY04, IFC established a funding mechanism for technical assistance and advisory services. The funding mechanism is used to finance the Corporation's technical assistance and advisory activities. Amounts designated for technical assistance and advisory services are determined based on the Corporation's annual operating income in excess of $150 million, and contemplating the financial capacity and priorities of the Corporation. Expenditures for the various approved technical assistance and advisory projects are recorded as expenses in the Corporation's income statement in the year in which they occur and have the effect of reducing retained earnings designated for technical assistance and advisory services. During the year ended June 30, 2004, $225 million was designated for the funding mechanism for technical assistance and advisory services. There were no expenditures under the technical assistance and advisory services funding mechanism in the year ended June 30, 2004. As of June 30, 2004, the Board of Directors has approved $77 million in respect of proposed future technical assistance and advisory activities which are expected to be expended under the technical assistance and advisory services funding mechanism beginning in the years ending June 30, 2005 through June 30, 2009, including $43 million projected in the year ending June 30, 2005. Actual amounts expended may differ from projected amounts, both in terms of amounts and timing. Liquid asset portfolio - The Corporation's liquid funds are invested in government and agency obligations, time deposits and asset-backed securities. Government and agency obligations include long and short positions in highly rated fixed rate bonds, notes, bills and other obligations issued or unconditionally guaranteed by governments of countries or other official entities including government agencies and instrumentalities or by multilateral organizations. The liquid asset portfolio, as defined by the Corporation and as detailed in note B, comprises: these time deposits and securities; related derivative instruments; securities purchased under resale agreements, securities sold under repurchase agreements and payable for cash collateral received; receivables from sales of securities and payables for purchases of securities; and related accrued income and charges. Trading securities are carried at fair value with any changes in fair value reported in net gains and losses on trading activities. Interest on IFC 2004 ANNUAL REPORT 35 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS securities and amortization of premiums and accretion of discounts are reported in interest from time deposits and securities. The Corporation classifies due from banks, time deposits and securities (collectively, cash and cash equivalents) as an element of liquidity in the statement of cash flows because they are readily convertible to known amounts of cash within 90 days. Repurchase and resale agreements - Repurchase agreements are contracts under which a party sells securities and simultaneously agrees to repurchase the same securities at a specified future date at a fixed price. Resale agreements are contracts under which a party purchases securities and simultaneously agrees to resell the same securities at a specified future date at a fixed price. It is the Corporation's policy to take possession of securities purchased under resale agreements, which are primarily liquid government securities. The market value of these securities is monitored and, within parameters defined in the agreements, additional collateral is obtained when their value declines. The Corporation also monitors its exposure with respect to securities sold under repurchase agreements and, in accordance with the terms of the agreements, requests the return of excess securities held by the counterparty when their value increases. Repurchase and resale agreements are accounted for as collateralized financing transactions and recorded at the amount at which the securities were acquired or sold plus accrued interest. Securities purchased under resale agreements, securities sold under agreements to repurchase and securities payable for cash collateral received are recorded at fair value. Borrowings - To diversify its access to funding and reduce its borrowing costs, the Corporation borrows in a variety of currencies and uses a number of borrowing structures, including foreign exchange rate-linked, inverse floating rate and zero coupon notes. Generally, the Corporation simultaneously converts such borrowings into variable rate US dollar borrowings through the use of currency and interest rate swap transactions. Under certain outstanding borrowing agreements, the Corporation is not permitted to mortgage or allow a lien to be placed on its assets (other than purchase money security interests) without extending equivalent security to the holders of such borrowings. Borrowings are recorded at the amount repayable at maturity, adjusted for unamortized premium and unaccreted discount. Where borrowings are part of a designated hedging relationship employing derivative instruments, the carrying amount is adjusted for changes in fair value attributable to the risk being hedged. Adjustments for changes in fair value attributable to hedged risks are reported in net gains and losses on other financial instruments in the income statement. Interest on borrowings and amortization of premiums and accretion of discounts are reported in charges on borrowings. Risk management, derivative instruments and hedge accounting - The Corporation enters into transactions in various derivative instruments for financial risk management purposes in connection with its principal business activities, including lending, client risk management, borrowing, liquid asset portfolio management and asset and liability management. The Corporation does not use derivatives for speculative, marketing or merchandising purposes. All derivative instruments are recorded on the balance sheet at fair value as derivative assets or derivative liabilities. Where they are not clearly and closely related to the host contract, certain derivative instruments embedded in loans, equity investments and market borrowing transactions entered into on or after January 1, 1999 are bifurcated from the host contract and recorded at fair value as derivative assets and liabilities. The value at inception of such embedded derivatives is excluded from the carrying value of the host contracts on the balance sheet. Changes in fair values of derivative instruments used in liquid asset portfolio management activities are recorded in net gains and losses on trading activities. Changes in fair values of derivative instruments other than those used in liquid asset portfolio management activities are recorded in other unrealized gains and losses on financial instruments. Subject to certain specific qualifying conditions in SFAS No. 133, a derivative instrument may be designated either as a hedge of the fair value of an asset or liability (fair value hedge), or as a hedge of the variability of cash flows of an asset or liability or forecasted transaction (cash flow hedge). For a derivative instrument qualifying as a fair value hedge, fair value gains or losses on the derivative instrument are reported in net income, together with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged. For a derivative instrument qualifying as a cash flow hedge, fair value gains or losses associated with the risk being hedged are reported in other comprehensive income and released to net income in the period(s) in which the effect on net income of the hedged item is recorded. Fair value gains and losses on a derivative instrument not qualifying as a hedge are reported in net income. The Corporation has designated certain hedging relationships in its borrowing and lending activities as fair value hedges. The Corporation generally matches the terms of its derivatives with the terms of the specific underlying financial instruments hedged, in terms of currencies, maturity dates, reset dates, interest rates and other features. However, the valuation methodologies applied to the derivative and the hedged financial instrument, as prescribed by SFAS No. 133, may differ. The resulting ineffectiveness calculated for such relationships is recorded in net gains and losses on other financial instruments in the income statement. The Corporation has not designated any hedging relationships as cash flow hedges. The risk management policy for each of the Corporation's principal business activities and the accounting policies particular to them are described below. Lending activities The Corporation's policy is to closely match the currency, rate basis and maturity of its loans and borrowings. Derivative instruments are used to convert the cash flows from fixed rate US dollar or non-US dollar loans into variable rate US dollars. The impact on net income of changes in fair value of interest rate swaps qualifying for the shortcut method under SFAS No. 133 is exactly offset by a corresponding adjustment to the fair value of the related loans. The Corporation has elected not to designate hedging relationships for all other lending-related derivatives that do not qualify for the shortcut method. 36 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS Client risk management activities The Corporation enters into derivatives transactions with its clients to help them hedge their own currency, interest rate or commodity risk, which, in turn, improves the overall quality of the Corporation's loan portfolio. To hedge the market risks that arise from these transactions with clients, the Corporation enters into offsetting derivative transactions with matching terms with authorized market counterparties. Changes in fair value of all derivatives associated with these activities are reflected currently in net income. Though hedge accounting is not applicable to these activities, the matching of terms between the offsetting transactions minimizes the impact on net income. Fees and spreads charged on these transactions are recorded as income on an accrual basis. Borrowing activities The Corporation issues debt securities in various capital markets with the objectives of minimizing its borrowing costs, diversifying funding sources, and developing member countries' capital markets, sometimes using complex structures. These structures include borrowings payable in multiple currencies, or borrowings with principal and/or interest determined by reference to a specified index such as a stock market index, a reference interest rate, a commodity index, or one or more foreign exchange rates. The Corporation uses derivative instruments with matching terms, primarily currency and interest rate swaps, to convert such borrowings into variable rate US dollar obligations, consistent with the Corporation's matched funding policy. The Corporation has designated the majority of derivatives associated with borrowing activities as fair value hedges of the underlying borrowings. There are a small number of cash flow-like hedging transactions for which no hedge relationship has been designated. Liquid asset portfolio management activities The Corporation manages the interest rate, currency and other market risks associated with certain of the time deposits and securities in its liquid asset portfolio by entering into derivative transactions to convert the cash flows from those instruments into variable rate US dollars, consistent with the Corporation's matched funding policy. The derivative instruments used include short-term, over-the-counter foreign exchange forwards (covered forwards), interest rate and currency swaps, and exchange-traded interest rate futures and options. As the entire liquid asset portfolio is classified as a trading portfolio, all securities (including derivatives) are carried at fair value, and no hedging relationships have been designated. Asset and liability management In addition to the risk managed in the context of its business activities detailed above, the Corporation faces residual market risk in its overall asset and liability management. Residual currency risk is managed by monitoring the aggregate position in each lending currency and eliminating the net excess asset or liability position through spot sales or purchases. Interest rate risk due to reset date mismatches is reduced by synchronizing the reset dates on assets and liabilities and managing overall interest rate risk on an aggregate basis. Interest rate risk arising from mismatches due to writedowns, prepayments and reschedulings, and residual reset date mismatches, is monitored by measuring the sensitivity of the present value of assets and liabilities in each currency to each basis point change in interest rates. The Corporation monitors the credit risk associated with these activities by careful assessment and monitoring of prospective and actual clients and counterparties. In respect of liquid assets and derivatives transactions, credit risk is managed by establishing exposure limits based on the credit rating and size of the individual counterparty. In addition, the Corporation has entered into master agreements governing derivative transactions that contain close-out and netting provisions and collateral arrangements. Under these agreements, if the Corporation's credit exposure to a counterparty, on a mark-to-market basis, exceeds a specified level, the counterparty must post collateral to cover the excess, generally in the form of liquid government securities. Resource mobilization - The Corporation mobilizes funds from commercial banks and other financial institutions (Participants) by facilitating loan participations, without recourse. These loan participations are administered and serviced by the Corporation on behalf of the Participants. The disbursed and outstanding balances of the loan participations are not included in the Corporation's balance sheet. Pension and other postretirement benefits - IBRD has a defined benefit Staff Retirement Plan (SRP), a Retired Staff Benefits Plan (RSBP) and a Post-Employment Benefits Plan (PEBP) that cover substantially all of its staff members as well as the staff of the Corporation and of MIGA. The SRP provides regular pension benefits and includes a cash balance plan. The RSBP provides certain health and life insurance benefits to eligible retirees. The PEBP provides pension benefits administered outside the SRP. All costs associated with these plans are allocated between IBRD, the Corporation, and MIGA based upon their employees' respective participation in the plans. In addition, the Corporation and MIGA reimburse IBRD for their share of any contributions made to these plans by IBRD. The net periodic pension and other postretirement benefit income or expense allocated to the Corporation is included in income from (contributions to) Staff Retirement Plan and cost of (income from) other postretirement benefits, respectively, in the income statement. The Corporation includes a receivable from IBRD in receivables and other assets, representing prepaid pension and other postretirement benefit costs. Accounting and financial reporting developments - On January 17, 2003, FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities ­ an interpretation of ARB No. 51 (FIN 46). During December 2003, FASB replaced FIN 46 with FASB Interpretation No. 46, Consolidation of Variable Interest Entities ­ an interpretation of ARB No. 51 (FIN 46R). FIN 46 and FIN 46R define certain "variable interest entities" (VIEs) and require parties to such entities to assess and measure variable interests in the VIEs for the purpose of determining possible consolidation of the VIEs. Enterprises are required to apply the provisions of FIN 46 to VIEs created after January 31, 2003. Entities with an interest in an entity that is subject to FIN 46R and that is created after December 31, 2003 are required to apply the provisions of FIN 46R to that entity immediately. Nonpublic entities are required to apply the provisions of FIN 46R to all entities that are subject to FIN 46R by the beginning of the first annual period beginning after December 15, 2004. IFC applied FIN 46 to entities created after January 31, 2003 and applied FIN 46R to entities created after December 31, 2003. As a result of its analysis, IFC did not identify any material variable interests in VIEs created after January 31, 2003, and accordingly, no such entities have been consolidated into IFC's financial statements. Pursuant to the requirements for nonpublic entities (nonpublic entities as defined in SFAS No. 123, Accounting for Stock-Based Compensation), IFC is required to apply the provisions of FIN 46R to entities created before January 31, 2003 in its financial statements for the year ending June 30, 2006. IFC 2004 ANNUAL REPORT 37 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS During the year ended June 30, 2003, FASB issued Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 codifies certain implementation decisions previously issued by the Derivatives Implementation Group and addresses additional implementation issues relating to the definition of a derivative. The Standard also clarifies the definition of a financial guarantee to conform with FASB Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. SFAS No. 149 was effective for the Corporation on July 1, 2003 (FY04), and had no material impact on the financial position or results of operations for the Corporation. During the year ended June 30, 2003, FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150 clarifies how the issuer classifies and measures certain financial instruments with characteristics of both liabilities and equities and is expected to lead to an increase in the number of quasi-debt/quasi-equity instruments issued being classified as liabilities on the issuer's balance sheet. SFAS No. 150 was effective for the Corporation on July 1, 2003 (FY04), and had no material impact on either the financial position or the results of operations of the Corporation. In March 2004, FASB ratified the consensus reached by the Emerging Issues Task Force (EITF) on Issue No. 03-1, The Meaning of Other- Than-Temporary Impairment and its Application to Certain Investments. EITF 03-1 was issued to clarify the meaning of "other-than-temporary impairment" and its application to investments classified as either available-for-sale or held-to-maturity under Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (including individual securities and investments in mutual funds), and investments accounted for under the cost method. The guidance in EITF 03-1 is effective for reporting periods beginning after June 15, 2004, and the disclosures for investments held at cost are required for fiscal years ending after June 15, 2004. The Corporation has assessed the impact of EITF 03-1 on its investments held at cost and has determined that EITF 03-1 will have no material impact on either the financial position or the results of operations of the Corporation. In addition, during the year ended June 30, 2004, FASB issued and/or approved various FASB Staff Positions, EITF Issues Notes, and other interpretative guidance related to Statements of Financial Accounting Standards and APB Opinions. The Corporation analyzed and impounded the new guidance, as appropriate, with no material impact on either the financial position or results of operations of the Corporation. 38 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE B ­ LIQUID ASSET PORTFOLIO The composition of the Corporation's liquid asset portfolio is as follows (US$ millions): June 30, 2004 June 30, 2003 Assets Due from banks $ 39 $ 53 Time deposits 2,375 2,293 Trading securities 12,842 10,572 Securities purchased under resale agreements 3,094 4,046 Receivables and other assets: Receivables from sales of securities 813 1,889 Accrued interest income on time deposits and securities 665 431 Accrued income on derivative instruments 24 15 Derivative assets 93 64 Total assets 19,945 19,363 Liabilities Payables and other liabilities: Payables for purchases of securities 1,733 2,388 Accrued charges on derivative instruments 112 96 Securities sold under repurchase agreements and payable for cash collateral received 4,329 3,053 Derivative liabilities 716 874 Total liabilities 6,890 6,411 Total net liquid asset portfolio $ 13,055 $ 12,952 The liquid asset portfolio is denominated primarily in US dollars; investments in other currencies, net of the effect of associated derivative instruments that convert non-US dollar securities into US dollar securities, represent less than 1% of the portfolio at June 30, 2004 (less than 1% - June 30, 2003). The annualized rate of return on the trading portfolio during the year ended June 30, 2004, was 1.4 % (3.7% - year ended June 30, 2003; 4.1% - year ended June 30, 2002). After the effect of associated derivative instruments, the liquid asset portfolio generally reprices within one year. Trading securities The composition of trading securities is as follows: Year ended June 30, 2004 At June 30, 2004 Fair value average Average daily balance Fair value maturity Average (US$ millions) (US$ millions) (years) yield (%) Government and agency obligations $ 5,208 $ 6,996 4.8 3.9 Asset-backed securities 2,785 2,767 14.6 1.7 Corporate securities 3,121 2,956 3.3 4.4 Money market funds 124 123 - 1.3 Total trading securities $ 11,238 $ 12,842 Year ended June 30, 2003 At June 30, 2003 Fair value average Average daily balance Fair value maturity Average (US$ millions) (US$ millions) (years) yield (%) Government and agency obligations $ 4,693 $ 4,296 5.4 4.2 Asset-backed securities 2,565 2,894 16.7 1.9 Corporate securities 3,010 3,242 3.4 4.7 Money market funds 140 140 - 1.2 Total trading securities $ 10,408 $ 10,572 The expected maturity of the asset-backed securities will differ from the contractual maturity, as reported above, due to prepayment features. IFC 2004 ANNUAL REPORT 39 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS Liquid asset portfolio income Income from the liquid asset trading portfolio for the years ended June 30, 2004, 2003 and 2002 comprises (US$ millions): 2004 2003 2002 Interest income $ 278 $ 318 $ 493 Net (losses) gains on trading activities: Realized (38) 131 45 Unrealized (66) 26 (14) Net (losses) gains on trading activities (104) 157 31 Translation adjustments 3 - - Total income from liquid asset portfolio $ 177 $ 475 $ 524 Collateral The estimated fair value of securities held by the Corporation at June 30, 2004 as collateral, in connection with derivatives transactions and purchase and resale agreements, that may be sold or repledged was $3,101 million ($4,500 million - June 30, 2003). NOTE C ­ LOANS AND EQUITY INVESTMENTS AND RESERVE AGAINST LOSSES The distribution of the disbursed portfolio by sector is as follows (US$ millions): June 30, 2004 June 30, 2003 Equity Equity Loans investments Total Loans investments Total Finance and insurance $ 2,190 $ 790 $ 2,980 $ 1,870 $ 794 $ 2,664 Utilities 1,188 134 1,322 1,183 110 1,293 Oil, gas and mining 684 137 821 549 150 699 Transportation and warehousing 626 117 743 636 170 806 Industrial and consumer products 637 86 723 537 90 627 Food and beverages 625 67 692 731 115 846 Information 505 184 689 483 181 664 Collective investment vehicles 52 585 637 13 550 563 Nonmetallic mineral product manufacturing 539 69 608 590 106 696 Primary metals 524 36 560 566 97 663 Chemicals 465 63 528 536 85 621 Accommodation and tourism services 313 64 377 306 61 367 Wholesale and retail trade 301 40 341 259 26 285 Paper and pulp 280 37 317 215 66 281 Textiles, apparel and leather 220 38 258 250 54 304 Agriculture and forestry 201 31 232 163 19 182 Health care 116 17 133 99 20 119 Plastics and rubber 64 41 105 65 39 104 Other 210 21 231 178 27 205 Total disbursed portfolio 9,740 2,557 12,297 9,229 2,760 11,989 Fair value adjustments 13 2 15 13 - 13 Carrying value of loans and equity investments $ 9,753 $ 2,559 $ 12,312 $ 9,242 $ 2,760 $ 12,002 The distribution of the disbursed loan and equity investment portfolio by geographical region is as follows (US$ millions): June 30, 2004 June 30, 2003 Equity Equity Loans investments Total Loans investments Total Latin America and Caribbean $ 3,957 $ 741 $ 4,698 $ 4,030 $ 907 $ 4,937 Europe and Central Asia 2,560 423 2,983 2,089 429 2,518 Asia 1,724 917 2,641 1,730 948 2,678 Sub-Saharan Africa 737 292 1,029 697 256 953 Middle East and North Africa 678 140 818 683 194 877 Other 84 44 128 - 26 26 Total disbursed portfolio 9,740 2,557 12,297 9,229 2,760 11,989 Fair value adjustments 13 2 15 13 - 13 Carrying value of loans and equity investments $ 9,753 $ 2,559 $ 12,312 $ 9,242 $ 2,760 $ 12,002 At June 30, 2004, 21% (20% - June 30, 2003) of the disbursed loan portfolio consisted of fixed rate loans, while the remainder was at variable rates. 40 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS Loan portfolio The currency composition and average yield of the disbursed loan portfolio are summarized below: June 30, 2004 June 30, 2003 Amount Average Amount Average (US $ millions) yield (%) (US $ million) yield (%) US dollar $ 8,286 5.1 $ 7,977 5.0 Euro 984 5.6 907 5.9 Other currencies 470 8.7 345 8.5 Total disbursed loan portfolio 9,740 5.3 9,229 5.2 Fair value adjustments 13 13 Carrying value of loans $ 9,753 $ 9,242 After the effect of interest rate and currency swaps, the Corporation's loans are principally denominated in US dollars. Disbursed loans in all currencies are repayable during the years ending June 30, 2005 through June 30, 2009, and thereafter, as follows (US$ millions): 2005 2006 2007 2008 2009 Thereafter Total Fixed rate loans $ 540 $ 338 $ 245 $ 205 $ 214 $ 468 $ 2,010 Variable rate loans 1,580 1,094 1,099 980 883 2,094 7,730 Total disbursed loan portfolio $ 2,120 $ 1,432 $ 1,344 $ 1,185 $ 1,097 $ 2,562 9,740 Fair value adjustments 13 Carrying value of loans $ 9,753 The Corporation's disbursed variable rate loans generally reprice within one year. Loans on which the accrual of interest has been discontinued amounted to $1,121 million at June 30, 2004 ($1,543 million - June 30, 2003). Interest income not recognized on nonaccruing loans during the year ended June 30, 2004 totaled $82 million ($82 million - year ended June 30, 2003; $106 million - year ended June 30, 2002). Interest collected on loans in nonaccrual status, related to current and prior years, during the year ended June 30, 2004 was $54 million ($40 million - year ended June 30, 2003; $39 million - year ended June 30, 2002). The average recorded investment in impaired loans during the year ended June 30, 2004, was $2,114 million ($2,543 million - year ended June 30, 2003). The recorded investment in impaired loans at June 30, 2004 was $1,781 million ($2,446 million - June 30, 2003). Reserve against losses on loans and equity investments Changes in the reserve against losses on loans and equity investments for the years ended June 30, 2004, 2003 and 2002 are summarized below (US$ millions): 2004 2003 2002 Equity Equity Equity Loans investments Total Loans investments Total Loans investments Total Beginning balance $ 1,684 $ 941 $ 2,625 $ 1,758 $ 1,013 $ 2,771 $ 1,363 $ 850 $ 2,213 Provision for losses (89) (74) (163) 47 50 97 373 268 641 Other adjustments (228) (201) (429) (121) (122) (243) 22 (105) (83) Ending balance $ 1,367 $ 666 $ 2,033 $ 1,684 $ 941 $ 2,625 $ 1,758 $ 1,013 $ 2,771 Provision for losses on loans, equity investments and guarantees in the income statement for the year ended June 30, 2004 includes $14 million release in respect of guarantees ($1 million - year ended June 30, 2003; $16 million - year ended June 30, 2002). At June 30, 2004 the accumulated reserve for losses on guarantees, included in the balance sheet in payables and other liabilities, was $16 million ($30 million - June 30, 2003). Other adjustments comprise loan and equity investment write-offs and recoveries, reserves against interest capitalized as part of a debt restructuring, and translation adjustments. Interest and financial fees from loans Interest and financial fees from loans for the years ended June 30, 2004, 2003 and 2002 comprise the following (US$ millions): 2004 2003 2002 Interest income $ 444 $ 414 $ 486 Commitment fees 15 18 11 Other financial fees 59 45 50 Total interest and financial fees from loans $ 518 $ 477 $ 547 IFC 2004 ANNUAL REPORT 41 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE D ­ GUARANTEES Under the terms of the Corporation's guarantees, the Corporation agrees to assume responsibility for the client's financial obligations in the event of default by the client, where default is defined as failure to pay when payment is due. Guarantees entered into by the Corporation generally have maturities consistent with those of the loan portfolio. Guarantees signed at June 30, 2004 totaled $908 million ($1,080 million ­ June 30, 2003). Guarantees of $315 million that were outstanding at June 30, 2004 ($314 million ­ June 30, 2003), were not included in loans on the Corporation's Balance Sheet. The outstanding amount represents the maximum amount of undiscounted future payments that the Corporation could be required to make under these guarantees. NOTE E ­ INCOME FROM EQUITY INVESTMENTS Income from equity investments for the years ended June 30, 2004, 2003 and 2002 comprise the following (US$ millions): 2004 2003 2002 Realized capital gains on equity sales $ 381 $ 52 $ 288 Dividends and profit participations 207 147 141 Net gains (losses) on equity-related derivatives (2) (3) - Custody and other fees (2) (1) (1) Total income from equity investments $ 584 $ 195 $ 428 Dividends and profit participations include $65 million ($61 million - year ended June 30, 2003 and $45 million - year ended June 30, 2002) of receipts received in freely convertible cash, net of cash disbursements, in respect of investments accounted for under the cost recovery method. NOTE F ­ PROJECTS APPROVED AND COMMITTED BUT NOT DISBURSED OR UTILIZED Projects approved by the Board of Directors not committed, loan and equity commitments signed but not yet disbursed, and guarantee and client risk management facilities signed but not yet utilized are summarized below (US$ millions): June 30, 2004 June 30, 2003 Projects approved but not committed: Loans $ 1,753 $ 1,961 Equity investments 398 610 Guarantees 240 246 Client risk management facilities 26 54 Total projects approved but not committed 2,417 2,871 Projects committed but not disbursed: Loans 3,521 2,697 Equity investments 1,035 758 Projects committed but not utilized: Guarantees 593 765 Client risk management facilities 103 168 Total projects committed but not disbursed or utilized 5,252 4,388 Total projects approved but not disbursed or utilized $ 7,669 $ 7,259 NOTE G ­ RESOURCE MOBILIZATION Loan participations arranged to be placed with Participants in respect of loans approved by the Board of Directors, loan participations signed as commitments for which disbursement has not yet been made and loan participations disbursed and outstanding and serviced by the Corporation for the Participants are as follows (US$ millions): June 30, 2004 June 30, 2003 Loan participations arranged to be placed with Participants approved but not committed $ 2,175 $ 2,517 Loan participations signed as commitments but not disbursed 455 472 Loan participations arranged to be placed with Participants approved but not disbursed $ 2,630 $ 2,989 Loan participations disbursed and outstanding which are serviced by the Corporation $ 5,060 $ 6,130 During the year ended June 30, 2004 the Corporation called and disbursed $964 million ($1,509 million - year ended June 30, 2003) of Participants' funds. The Corporation also sold $58 million ($15 million - year ended June 30, 2003) of its loans to Participants. In July 1995, the Corporation securitized and sold variable rate US dollar loan participations to a trust (the Trust). Concurrently, the Corporation provided a $20 million liquidity facility to the Trust and acquired $20 million of the Trust's Class C certificates. In January 2002, the Corporation exercised an option to reacquire the remaining outstanding loan participations owned by the Trust for $37 million, and the Trust was dissolved. As a result of the dissolution the Corporation recorded income of $15 million, included in interest and financial fees from loans in the income statement for the year ended June 30, 2002. Reserves against losses of $11 million were established on the reacquired 42 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS loans, included in provision for losses on loans, equity investments and guarantees for the year ended June 30, 2002. NOTE H ­ RECEIVABLES AND OTHER ASSETS Receivables and other assets are summarized below (US$ millions): June 30, 2004 June 30, 2003 Receivables from sales of securities $ 813 $ 1,889 Accrued interest income on time deposits and securities 665 431 Accrued income on derivative instruments 317 325 Accrued interest income on loans 94 99 Receivable from IBRD representing prepaid pension and other postretirement benefit costs 290 277 Headquarters building: Land 89 89 Building 184 184 Less: Building depreciation (33) (29) Headquarters building, net 240 244 Deferred charges and other assets 174 163 Total receivables and other assets $ 2,593 $ 3,428 NOTE I ­ BORROWINGS Market borrowings and associated derivatives The Corporation's borrowings outstanding from market sources and currency and interest rate swaps, net of unamortized issue premiums and discounts, are summarized below: June 30, 2004 Interest rate swaps Currency swaps notional principal Market borrowings payable (receivable) payable (receivable) Net currency obligation Weighted Weighted Notional Weighted Weighted Amount (US average Amount (US average amount (US average Amount (US average $ millions) cost (%) $ millions) cost (%) $ millions) cost (%) $ millions) cost (%) US dollar $ 7,696 4.6 $ 8,571 0.4 $ 6,935 1.3 $ 15,950 1.0 (7,253) (4.4) - - Japanese yen 4,984 4.1 (4,984) (4.1) - - - - Pound sterling 1,718 5.4 (1,718) (5.4) - - - - Hong Kong dollar 743 6.0 (743) (6.0) - - - - Euro 680 6.1 (680) (6.1) - - - - Australian dollar 535 4.8 (535) (4.8) - - - - South African rand 486 13.8 (486) (13.8) - - - - Canadian dollar 297 1.0 (297) (1.0) - - - - Colombian peso 230 12.5 (230) (12.5) - - - - New Zealand dollar 223 5.0 (223) (5.0) - - - - Swiss franc 80 2.5 (80) (0.3) 80 0.3 - - (80) (2.5) - - Singapore dollar 58 4.3 (58) (4.3) - - - - Hungarian Forints 48 9.0 (48) (9.0) - - - - Peruvian Soles Nuevos 14 7.3 (14) (7.3) - - - - Principal at face value 17,792 $ (1,525) $ (318) $ 15,950 Less: Unamortized discounts, net (701) Total market borrowings 17,091 Fair value adjustments (934) Carrying value of market borrowings $ 16,157 IFC 2004 ANNUAL REPORT 43 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2003 Interest rate swaps Currency swaps notional principal Market borrowings payable (receivable) payable (receivable) Net currency obligation Weighted Weighted Notional Weighted Weighted Amount (US average Amount (US average amount (US average Amount (US average $ millions) cost (%) $ millions) cost (%) $ millions) cost (%) $ millions) cost (%) US dollar $ 7,512 5.1 $ 8,614 0.3 $ 6,705 1.1 $ 15,889 0.9 (6,942) (4.7) - - Japanese yen 3,812 4.7 (3,812) (4.7) - - - - Pound sterling 2,349 5.7 (2,349) (5.5) 250 3.8 - - (250) (5.8) - - Euro 1,052 5.7 (1,052) (5.7) - - - - Hong Kong dollar 872 6.6 (872) (6.6) - - - - South African rand 398 13.8 (398) (13.8) - - - - Canadian dollar 295 1.0 (295) (1.0) - - - - Australian dollar 278 4.7 (278) (4.7) - - - - New Zealand dollar 204 5.0 (204) (5.0) - - - - Colombian peso 125 13.7 (125) (13.7) - - - - Swiss franc 74 2.7 (74) 0.1 74 0.1 - - (74) (2.7) - - Singapore dollar 57 4.3 (57) (4.3) - - - - Principal at face value 17,028 $ (902) $ (237) $ 15,889 Less: Unamortized discounts, net (595) Total market borrowings 16,433 Fair value adjustments 748 Carrying value of market borrowings $ 17,181 The weighted average cost of the Corporation's borrowings outstanding from market sources after currency and interest rate swap transactions was 1.0% at June 30, 2004 (0.9% - June 30, 2003). The weighted average remaining maturity of the Corporation's borrowings from market sources was 11.9 years at June 30, 2004 (10.5 years - June 30, 2003). Net fair value adjustments to the carrying value of market borrowings comprises $(934) million ($748 million - June 30, 2003) representing adjustments to the carrying value of transactions in designated fair value hedging relationships. The net nominal amount receivable from currency swaps of $1,525 million and the net notional amount receivable from interest rate swaps of $318 million at June 30, 2004 ($902 million and $237 million - June 30, 2003), shown in the above table, are represented by currency and interest rate swap assets at fair value of $951 million and currency and interest rate swap liabilities at fair value of $637 million ($1,590 million and $166 million - June 30, 2003), included in derivative assets and derivative liabilities, respectively, on the balance sheet. Borrowings from IBRD Borrowings outstanding from IBRD are summarized below: June 30, 2004 June 30, 2003 Principal Weighted Principal Weighted amount average amount average (US$ millions) cost (%) (US$ millions) cost (%) US dollar $ 77 6.4 $ 102 6.4 Euro 7 8.4 15 8.0 Other currencies 13 6.2 17 6.1 Total borrowings outstanding from IBRD $ 97 $ 134 The weighted average remaining maturity of borrowings from IBRD was 2.9 years at June 30, 2004 (3.7 years - June 30, 2003). There were no undrawn balances on committed borrowings from IBRD at June 30, 2004 ($nil - June 30, 2003). Charges on borrowings for the year ended June 30, 2004 includes $8 million ($10 million - year ended June 30, 2003; $12 million - year ended June 30, 2002) in respect of IBRD borrowings. 44 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS Maturity of borrowings The principal amounts repayable on borrowings outstanding in all currencies, gross of any premiums or discounts, during the years ending June 30, 2005 through June 30, 2009 and thereafter are summarized below (US$ millions): 2005 2006 2007 2008 2009 Thereafter Total Borrowings from market sources $ 1,968 $ 1,471 $ 1,848 $ 1,602 $ 1,210 $ 9,693 $ 17,792 Borrowings from IBRD 42 24 18 9 3 1 97 Total borrowings, gross $ 2,010 $ 1,495 $ 1,866 $ 1,611 $ 1,213 $ 9, 694 17,889 Less: Unamortized discounts, net (701) Fair value adjustments (934) Carrying value of borrowings $ 16,254 After the effect of interest rate and currency swaps, the Corporation's borrowings generally reprice within one year. NOTE J ­ PAYABLES AND OTHER LIABILITIES Payables and other liabilities are summarized below (US$ millions): June 30, 2004 June 30, 2003 Accrued charges on borrowings $ 269 $ 285 Accrued charges on derivative instruments 205 192 Payables for purchases of securities 1,735 2,388 Accounts payable, accrued expenses and other liabilities 191 212 Deferred income 47 45 Total payables and other liabilities $ 2,447 $ 3,122 NOTE K ­ CAPITAL TRANSACTIONS The Corporation's authorized share capital was increased to $2,450 million through two capital increases in 1992. The subscription and payment period for shares then allocated ended on August 1, 1999, but the Corporation has agreed to defer the payment date for certain member countries beyond this date. Pursuant to these arrangements, $1 million of subscribed shares remained unpaid at June 30, 2004 ($2 million - June 30, 2003). During the year ended June 30, 2004, 720 shares were subscribed by member countries at a par value of $1,000 each (nil - year ended June 30, 2001). $1 million was paid in on account of pending subscriptions in the year ended June 30, 2004 ($nil million - year ended June 30, 2003). On August 3, 2004, the Board of Directors approved the designation of $225 million of the Corporation's retained earnings for the purposes of the funding mechanism for technical assistance and advisory services. NOTE L ­ OTHER INCOME Other income for the year ended June 30, 2004, predominantly comprises $16 million of fees collected from clients for expenses incurred by the Corporation on their behalf, included in administrative expenses ($15 million - year ended June 30, 2003; $18 million - year ended June 30, 2002). NOTE M ­ CONTRIBUTIONS TO SPECIAL PROGRAMS From time to time, the Board of Directors approves recommendations under which the Corporation contributes to special programs, comprising the Corporation's Global Small and Medium Enterprise Capacity Building Facility, Technical Assistance Fund and Foreign Investment Advisory Service and other donor-funded operations. During the year ended June 30, 2004, the Corporation contributed a total of $29 million to these facilities ($28 million - year ended June 30, 2003; $22 million - year ended June 30, 2002), of which the largest amounts were attributable to the Global SME Capacity Building facility and the Private Enterprise Partnership. IFC 2004 ANNUAL REPORT 45 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE N ­ NET GAINS (LOSSES) ON OTHER FINANCIAL INSTRUMENTS Other unrealized gains on financial instruments for the year ended June 30, 2004 comprises (US$ millions): 2004 2003 2002 Difference between change in fair value of derivative instruments designated as a fair value hedge and change in fair value of hedged items attributable to risks being hedged $ 65 $ (32) $ 81 Change in fair value of derivative instruments, other than those associated with liquid asset investments, not designated as a hedge (54) (6) (31) Amortization of difference between fair value and carrying value of hedged items at July 1, 2000 not designated for hedge accounting under SFAS No. 133 (2) (5) (2) Release from accumulated other comprehensive income of transition gain on cash flow-like hedges 2 2 6 Net gains (losses) on other financial instruments $ 11 $ (41) $ 54 Of the total other unrealized gains and losses on financial instruments, unrealized losses of $26 million ($nil million - year ended June 30, 2003; gains $72 million ­ year ended June 30, 2002) are attributable to borrowings and related derivatives transactions, unrealized gains of $36 million (losses $40 million - year ended June 30, 2003; losses $19 million ­ year ended June 30, 2002) are attributable to loans and related derivatives transactions and unrealized gains of $1 million (losses $1 million - year ended June 30, 2003; gains $1 million - year ended June 30, 2002) are attributable to client risk management activities. Upon the adoption of SFAS No. 133 on July 1, 2000, the Corporation recorded a gain of $14 million to accumulated other comprehensive income to adjust the book value to fair value of cross-currency interest rate swaps in cash flow-like hedges. The Corporation elected not to seek hedge accounting for these transactions under SFAS No.133 and, accordingly, records the cross-currency interest rate swaps at fair value, with the change in fair value included in earnings. The gain recorded in accumulated other comprehensive income upon adoption of SFAS No.133 is released into earnings over the remaining original hedge term. The amounts released for the years ended June 30, 2004 and June 30, 2003 are shown above; the expected release for the year ending June 30, 2005 is $nil million. NOTE O ­ DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS Many of the Corporation's financial instruments are not actively traded in any market. Accordingly, estimates and present value calculations of future cash flows are used to estimate the fair values. Determining future cash flows for fair value estimation is subjective and imprecise, and minor changes in assumptions or methodologies may materially affect the estimated values. The excess or deficit resulting from the difference between the carrying amounts and the fair values presented does not necessarily reflect the realizable values, since the Corporation generally holds loans, borrowings and other financial instruments to maturity with the aim of realizing their recorded values. The estimated fair values reflect the interest rate environments as of June 30, 2004 and June 30, 2003. In different interest rate environments, the fair value of the Corporation's financial assets and liabilities could differ significantly, especially the fair value of certain fixed rate financial instruments. Reasonable comparability of fair values among financial institutions is not likely, because of the wide range of permitted valuation techniques and numerous estimates that must be made in the absence of secondary market prices. This lack of objective pricing standards introduces a greater degree of subjectivity and volatility to these derived or estimated fair values. Therefore, while disclosure of estimated fair values of financial instruments is required, readers are cautioned in using these data for purposes of evaluating the financial condition of the Corporation. The fair values of the individual financial instruments do not represent the fair value of the Corporation taken as a whole. The methodologies used and key assumptions made to estimate fair values as of June 30, 2004 and June 30, 2003 are summarized below. Liquid assets - The estimated fair value of time deposits and the trading securities portfolio are based on quoted market prices and the present value of estimated future cash flows using appropriate discount rates. Derivative instruments - Fair values for covered forwards were derived by using quoted market forward exchange rates. Fair values for other derivative instruments were derived by determining the present value of estimated future cash flows using appropriate discount rates. Loans and loan commitments - The Corporation generally has not sold its loans from the portfolio, and there is no comparable secondary market. Fair values for fixed rate loans and loan commitments were determined using a discounted cash flow model based on a discount rate comprising the fixed rate loan spread plus the year-end estimated cost of funds. Since rates on variable rate loans and loan commitments are generally reset on a quarterly or semiannual basis, the carrying value adjusted for credit risk was determined to be the best estimate of fair value. The Corporation also holds options to convert loans into equity of certain of its investee companies. Fair values of these conversion options are based on quoted market prices or other calculated values of the underlying equity investment. Equity investments - Fair values were determined using market prices where available, put option prices, book values or cost, certain of which were discounted based upon management's estimate of net realizable value. Where market prices were not available or alternate valuation techniques were not practical, cost was determined to be the best estimate of fair value. Borrowings - Fair values were derived by determining the present value of estimated future cash flows using appropriate discount rates. Estimated fair values of the Corporation's financial assets and liabilities and off-balance sheet financial instruments are summarized below 46 IFC 2004 ANNUAL REPORT INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS (US$ millions). The Corporation's credit exposure is represented by the estimated fair values of its financial assets. June 30, 2004 June 30, 2003 Carrying Fair value amount adjustments Fair value Fair value Financial assets Due from banks, time deposits, securities and securities purchased under resale agreements $ 18,397 $ - $ 18,397 $ 17,004 Loans 9,753 469 10,222 9,656 Equity investments 2,559 1,285 3,844 4,561 Total loans and equity investments 12,312 1,754 14,066 14,217 Reserve against losses (2,033) - (2,033) (2,625) Net loans and equity investments 10,279 1,754 12,033 11,592 Derivative assets: Liquid asset portfolio-related 93 - 93 64 Loans-related 15 - 15 12 Borrowings-related 951 - 951 1,590 Client risk management-related 33 - 33 68 Total derivative assets 1,092 - 1,092 1,734 Nonfinancial assets 2,593 2,593 3,428 Total assets $ 32,361 $ 1,754 $ 34,115 $ 33,758 Financial liabilities Securities sold under repurchase agreements and payable for cash collateral received $ 4,329 $ - $ 4,329 $ 3,053 Market and IBRD borrowings outstanding 16,254 4 16,258 17,307 Derivative liabilities: Liquid asset portfolio-related 716 - 716 874 Loans-related 162 - 162 154 Borrowings-related 637 - 637 166 Client risk management-related 34 - 34 70 Total derivative liabilities 1,549 - 1,549 1,264 Nonfinancial liabilities 2,447 - 2,447 3,122 Total liabilities $ 24,579 $ 4 $ 24,583 $ 24,746 June 30, 2004 June 30, 2003 Carrying Fair value amount adjustments Fair value Fair value Off-balance sheet financial instruments Loan commitments $ 3,521 $ 9 $ 3,530 $ 2,712 NOTE P ­ CURRENCY POSITION The Corporation conducts its operations for its loans, time deposits and securities and borrowings in multiple currencies. The Corporation's policy is to minimize the level of currency risk by closely matching the currency of its assets (other than equity investments and quasi-equity investments) and liabilities by using hedging instruments. The Corporation's equity investments in enterprises located in its developing member countries are typically made in the local currency of the country. As a matter of policy, the Corporation carries the currency risk of equity investments and quasi-equity investments and funds these investments from its capital and retained earnings. IFC 2004 ANNUAL REPORT 47 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS The following table summarizes the Corporation's exposure in major currencies at June 30, 2004 and June 30, 2003 (US$ millions): June 30, 2004 Japanese Other Fair value US dollar Euro yen currencies adjustments Total Assets Cash and cash equivalents $ 11,859 $ 2,831 $ 455 $ 158 $ - $ 15,303 Securities purchased under resale agreements 2,916 178 - - - 3,094 Loans disbursed and outstanding 8,286 984 26 444 13 9,753 Equity investments disbursed and outstanding - - - 2,557 2 2,559 Total investments 8,286 984 26 3,001 15 12,312 Reserve against losses (1,779) (183) (4) (67) - (2,033) Net investments 6,507 801 22 2,934 15 10,279 Derivative assets 2,346 1,800 5,411 4,237 (12,702) 1,092 Receivables and other assets 2,260 121 116 96 - 2,593 Total assets $ 25,888 $ 5,731 $ 6,004 $ 7,425 $ (12,687) $ 32,361 Liabilities Securities sold under repurchase agreements and payable for cash collateral received $ 3,126 $ 1,203 $ - $ - $ - $ 4,329 Borrowings 7,457 677 4,993 4,061 (934) 16,254 Derivative liabilities 8,232 3,598 902 697 (11,880) 1,549 Payables and other liabilities 2,127 115 107 98 - 2,447 Total liabilities $ 20,942 $ 5,593 $ 6,002 $ 4,856 $ (12,814) $ 24,579 June 30, 2003 Japanese Other Fair value US dollar Euro yen currencies adjustments Total Assets Cash and cash equivalents $ 9,142 $ 2,695 $ 1,009 $ 112 $ - $ 12,958 Securities purchased under resale agreements 4,046 - - - - 4,046 Loans disbursed and outstanding 7,977 907 27 318 13 9,242 Equity investments disbursed and outstanding - - - 2,760 - 2,760 Total investments 7,977 907 27 3,078 13 12,002 Reserve against losses (2,398) (185) (4) (38) - (2,625) Net investments 5,579 722 23 3,040 13 9,377 Derivative assets 3,810 1,409 4,148 4,418 (12,051) 1,734 Receivables and other assets 3,082 198 87 61 - 3,428 Total assets $ 25,659 $ 5,024 $ 5,267 $ 7,631 $ (12,038) $ 31,543 Liabilities Securities sold under repurchase agreements and payable for cash collateral received $ 2,675 $ 378 $ - $ - $ - $ 3,053 Borrowings 7,369 1,048 3,821 4,329 748 17,315 Derivative liabilities 9,054 3,308 1,373 436 (12,907) 1,264 Payables and other liabilities 2,756 176 79 111 - 3,122 Total liabilities $ 21,854 $ 4,910 $ 5,273 $ 4,876 $ (12,159) $ 24,754 NOTE Q ­ SEGMENT REPORTING For management purposes, the Corporation's business comprises two segments: client services and treasury services. The client services segment consists primarily of lending and equity investment activities. Operationally, the treasury services segment consists of the borrowing, liquid asset management, asset and liability management and client risk management activities. Consistent with internal reporting, net income (expense) from asset and liability management and client risk management activities in support of client services are allocated to client services segment. The assessment of segment performance by senior management includes net income for each segment, return on assets, and return on capital employed. The Corporation's management reporting system and policies are used to determine revenues and expenses attributable to each segment. Consistent with internal reporting, administrative expenses are allocated to each segment based largely upon personnel costs and segment head counts. Transactions between segments are immaterial and, thus, are not a factor in reconciling to the consolidated data. The accounting policies of the Corporation's segments are, in all material respects, consistent with those described in note A, "Summary of Significant Accounting and Related Policies." 48 IFC 2004 ANNUAL REPORT Page 21 INTERNATIONAL FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS An analysis of the Corporation's major components of income and expense by business segment for the years ended June 30, 2004, 2003 and 2002 is given below (US$ millions): 2004 2003 2002 Client Treasury Client Treasury Client Treasury services services Total services services Total services services Total Interest income $ 518 $ 278 $ 796 $ 477 $ 318 $ 795 $ 547 $ 493 $ 1,040 Charges on borrowings (41) (100) (141) (79) (147) (226) (151) (287) (438) Net gains (losses) on trading activities - (104) (104) - 157 157 - 31 31 Income from equity investments 584 - 584 195 - 195 428 - 428 Release of (provision for) losses 177 - 177 (98) - (98) (657) - (657) Service fees 41 - 41 51 - 51 40 - 40 Administrative expenses (354) (6) (360) (326) (6) (332) (321) (6) (327) Other noninterest income (expense) (14) 3 (11) (14) - (14) 44 - 44 Operating income (loss) 911 71 982 206 322 528 (70) 231 161 Net gains (losses) on other financial instruments 37 (26) 11 (41) - (41) (18) 72 54 Net income (loss) $ 948 $ 45 $ 993 $ 165 $ 322 $ 487 $ (88) $ 303 $ 215 Geographical segment data in respect of client services are disclosed in Note C, and are not relevant in respect of treasury services. NOTE R ­ PENSION AND OTHER POSTRETIREMENT BENEFITS IBRD has a defined benefit Staff Retirement Plan (SRP), a Retired Staff Benefits Plan (RSBP) and a Post-Employment Benefits Plan (PEBP) that cover substantially all of its staff members as well as the staff of the Corporation and of MIGA. The SRP provides regular pension benefits and includes a cash balance plan. The RSBP provides certain health and life insurance benefits to eligible retirees. The PEBP provides pension benefits administered outside the SRP. All costs associated with these plans are allocated between IBRD, the Corporation, and MIGA based upon their employees' respective participation in the plans. In addition, the Corporation and MIGA reimburse IBRD for their share of any contributions made to these plans by IBRD. Net cost from the SRP allocated to the Corporation for the year ended June 30, 2004 was $12 million ($15 million - year ended June 30, 2003; $36 million - year ended June 30, 2002). The portion of the cost for the RSBP and the PEBP attributable to the Corporation for the fiscal year ended June 30, 2004 was $7 million ($9 million - year ended June 30, 2003; $5 million - year ended June 30, 2002). In addition, at June 30, 2004 $290 million was receivable by the Corporation from IBRD ($277 million - June 30, 2003), representing the accumulated excess of its contributions to pension and other postretirement benefit assets over its allocated net periodic pension and other postretirement benefit cost. NOTE S ­ SERVICE AND SUPPORT PAYMENTS The Corporation obtains certain administrative and overhead services from IBRD in those areas where common services can be efficiently provided by IBRD. This includes shared costs of the Boards of Governors and Directors, and other services such as communications, internal auditing, administrative support, supplies and insurance. Payments for these services are made by the Corporation to IBRD based on negotiated fees, chargebacks and allocated charges, where chargeback is not feasible. Expenses allocated to the Corporation for the year ended June 30, 2004, were $21 million ($19 million - year ended June 30, 2003; $19 million - year ended June 30, 2002). NOTE T ­ REORGANIZATION COSTS In the year ended June 30, 2002, the Corporation undertook a major internal reorganization planning exercise designed to sharpen the focus on the needs of the Corporation's clients, strengthen developmental impact, increase the volume of high quality assets, and provide counter-cyclical support in countries affected by volatility in capital flows. The plan involved staff reductions, field office closings and reorganizations, and a headquarters reorganization which was substantially concluded during the year ending June 30, 2003. The Corporation originally charged $13 million associated with the reorganization, included in administrative expenses in the income statement for the year ended June 30, 2002. Actual expenses paid during the years ended June 30, 2004, June 30, 2003 and June 30, 2002 totaled $10 million. IFC 2004 ANNUAL REPORT 49 50 IFC 2004 ANNUAL REPORT Investment Portfolio Sub-Saharan Africa 54 East Asia and the Pacific 62 2004 Annual Report South Asia 67 Europe and Central Asia 70 Latin America and the Caribbean 78 Middle East and North Africa 88 Global 92 IFC 2004 ANNUAL REPORT 51 Investment Portfolio STATEMENT OF CUMULATIVE GROSS COMMITMENTS (at June 30, 2004) Cumulative commitments1 Cumulative commitments1 (US$ thousands) (US$ thousands) Country, region Number of Country, region Number of or other area enterprises IFC Syndications Total or other area enterprises IFC Syndications Total Afghanistan 3 8,322 ­ 8,322 Eritrea 1 949 ­ 949 Albania 9 97,389 8,917 106,306 Estonia 11 137,806 11,855 149,661 Algeria 9 112,175 5,557 117,732 Ethiopia 4 21,848 1,719 23,567 Angola 3 2,810 ­ 2,810 Fiji 7 25,059 2,500 27,559 Argentina 171 2,805,104 2,336,464 5,141,568 Finland 4 1,233 1,915 3,148 Armenia 3 9,087 ­ 9,087 Gabon 5 115,588 110,000 225,588 Australia 2 975 ­ 975 Gambia, The 8 6,943 ­ 6,943 Azerbaijan 16 167,175 72,930 240,105 Georgia 8 78,462 ­ 78,462 Bangladesh 19 202,088 52,745 254,833 Ghana 40 292,609 272,000 564,609 Barbados 3 8,625 ­ 8,625 Greece 7 26,292 41,107 67,400 Belarus 3 26,250 ­ 26,250 Grenada 2 8,000 ­ 8,000 Belize 3 21,500 11,000 32,500 Guatemala 17 251,075 110,000 361,075 Benin 8 2,939 ­ 2,939 Guinea 9 33,684 ­ 33,684 Bhutan 1 10,000 ­ 10,000 Guinea-Bissau 4 7,246 ­ 7,246 Bolivia 25 276,152 40,500 316,652 Guyana 4 4,911 ­ 4,911 Bosnia and 22 137,028 10,578 147,606 Haiti 2 1,911 ­ 1,911 Herzegovina Honduras 8 63,832 79,401 143,233 Botswana 5 6,770 ­ 6,770 Hungary 28 315,240 70,335 385,575 Brazil 160 3,829,560 3,056,792 6,886,352 India 172 2,696,075 525,057 3,221,131 Bulgaria 19 293,092 21,802 314,894 Indonesia 81 1,434,146 1,185,871 2,620,018 Burkina Faso 6 3,064 ­ 3,064 Iran, Islamic 8 41,343 8,199 49,542 Burundi 3 6,626 ­ 6,626 Republic of Cambodia 4 19,243 ­ 19,243 Israel 1 10,500 ­ 10,500 Cameroon 26 301,150 471,500 772,650 Italy 1 960 ­ 960 Cape Verde 5 10,009 ­ 10,009 Jamaica 15 185,682 79,694 265,376 Chad 3 15,172 13,900 29,072 Japan 1 40,000 ­ 40,000 Chile 41 958,429 496,733 1,455,162 Jordan 28 248,648 70,250 318,898 China 81 1,210,913 552,754 1,763,666 Kazakhstan 20 356,154 172,917 529,070 Colombia 64 893,472 487,631 1,381,103 Kenya 60 328,014 59,295 387,308 Congo, 9 74,923 ­ 74,923 Korea, Republic of 48 864,911 195,700 1,060,611 Democratic Kyrgyz Republic 8 48,661 ­ 48,661 Republic of Lao People's 4 3,247 ­ 3,247 Congo, Republic of 6 115,005 25,000 140,005 Democratic Republic Costa Rica 15 170,504 99,709 270,213 Latvia 5 73,897 35,000 108,897 Côte d'Ivoire 40 265,016 70,964 335,980 Lebanon 25 323,128 230,430 553,558 Croatia 10 205,120 97,657 302,777 Lesotho 2 454 ­ 454 Cyprus 7 70,739 645 71,384 Liberia 3 12,703 ­ 12,703 Czech Republic 16 396,808 245,588 642,396 Lithuania 8 81,637 9,309 90,946 Dominica 1 700 ­ 700 Macedonia, FYR 11 93,098 25,000 118,098 Dominican Republic 18 272,499 158,100 430,599 Madagascar 12 49,216 ­ 49,216 Ecuador 16 136,506 16,240 152,746 Malawi 14 35,854 ­ 35,854 Egypt 53 988,711 504,871 1,493,582 Malaysia 11 54,862 5,389 60,251 El Salvador 13 217,118 113,500 330,618 Maldives 3 33,750 8,500 42,250 52 IFC 2004 ANNUAL REPORT STATEMENT OF CUMULATIVE GROSS COMMITMENTS (at June 30, 2004) Cumulative commitments1 Cumulative commitments1 (US$ thousands) (US$ thousands) Country, region Number of Country, region Number of or other area enterprises IFC Syndications Total or other area enterprises IFC Syndications Total Mali 18 93,781 40,000 133,781 Sri Lanka 25 204,265 23,616 227,881 Mauritania 10 51,692 9,503 61,194 Sudan 6 27,268 6,489 33,757 Mauritius 11 38,619 96 38,715 Swaziland 8 47,779 ­ 47,779 Mexico 125 3,056,633 2,172,089 5,228,722 Syrian Arab Republic 3 20,288 ­ 20,288 Moldova 8 72,286 25,000 97,286 Tajikistan 9 27,323 ­ 27,323 Mongolia 5 10,150 ­ 10,150 Tanzania 38 91,065 13,041 104,105 Morocco 28 405,338 515,014 920,352 Thailand 64 1,213,028 1,701,374 2,914,403 Mozambique 21 207,977 ­ 207,977 Togo 7 18,600 ­ 18,600 Namibia 4 23,878 ­ 23,878 Trinidad and Tobago 12 204,279 235,000 439,279 Nepal 6 73,673 36,000 109,673 Tunisia 20 135,819 2,281 138,100 Nicaragua 9 29,643 929 30,571 Turkey 119 2,346,163 1,495,371 3,841,534 Niger 1 2,493 ­ 2,493 Uganda 38 77,396 1,588 78,985 Nigeria 52 459,329 113,155 572,484 Ukraine 9 99,493 ­ 99,493 Oman 3 28,860 57,000 85,860 Uruguay 12 124,050 20,000 144,050 Pakistan 91 1,289,564 536,769 1,826,333 Uzbekistan 14 64,964 12,900 77,864 Panama 14 429,533 153,300 582,833 Vanuatu 1 5,398 ­ 5,398 Papua New Guinea 2 13,300 ­ 13,300 Venezuela 37 811,230 703,791 1,515,021 Paraguay 4 15,008 ­ 15,008 Vietnam 24 233,033 203,375 436,408 Peru 44 565,119 298,621 863,740 Yemen, Republic of 8 39,517 1,105 40,622 Philippines 80 1,255,982 695,880 1,951,862 Zambia 28 150,023 20,286 170,309 Poland 43 459,772 115,317 575,088 Zimbabwe 51 284,262 99,000 383,262 Portugal 7 51,811 11,000 62,811 Romania 22 429,944 194,471 624,414 Regional Investments Russian Federation 75 1,585,543 209,838 1,795,381 Sub-Saharan Africa 28 490,534 1,906 492,440 Rwanda 3 5,166 ­ 5,166 East Asia and Saint Lucia 2 9,940 ­ 9,940 the Pacific 17 418,023 ­ 418,023 Samoa 4 1,085 ­ 1,085 South Asia 10 303,170 ­ 303,170 Saudi Arabia 1 7,600 ­ 7,600 Europe and 26 436,536 25,000 461,536 Senegal 19 100,260 12,398 112,658 Central Asia Serbia and 15 231,824 92,423 324,247 Latin America and 33 445,876 63,000 508,876 Montenegro the Caribbean Seychelles 6 29,359 2,500 31,859 Middle East and 8 108,160 ­ 108,160 Sierra Leone 4 29,186 ­ 29,186 North Africa Slovakia 7 357,109 ­ 357,109 Other2 17 59,814 1,400 61,214 Slovenia 12 225,160 47,383 272,543 Global 39 787,035 308,000 1,095,035 Somalia 2 975 ­ 975 South Africa 39 354,248 15,000 369,248 Total: 3,143 44,013,672 22,577,411 66,591,083 Spain 5 19,043 1,685 20,728 1. Commitments are composed of funds to be provided by IFC for its own account, funds to be provided by participants through the purchase of an interest in IFC's investment, and funds to be provided by other financial institutions in association with IFC, where IFC has rendered material assistance in mobilizing these funds. Cumulative commitments are composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rates, while the disbursed portion represents the cost of commitment at the time of disbursement. Beginning in FY04, the Corporation includes structured finance (guarantee) and risk management products in commitments. Accordingly, cumulative commitments as of June 30, 2004, are not directly comparable with cumulative commitments as of June 30, 2003, as reported in the Corporation's 2003 Annual Report. 2. Of this amount, $9.8 million represents investments made at a time when the authorities on Taiwan represented China in the International Finance Corporation. The balance represents investments in West Bank and Gaza. IFC 2004 ANNUAL REPORT 53 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Angola Enterprise Bank of Angola Finance & Insurance FY04 0.7 ­ ­ 0.7 0.7 Fábrica de Bleach Corasol Limitada Chemicals FY99 0.6 ­ 0.6 ­ 0.6 0.6 0.7 1.3 Benin Bank of Africa, Benin (BOAB) Finance & Insurance FY93, 94, 95 0.3 ­ ­ 0.2 0.2 Finadev Microfinance Finance & Insurance FY01 0.3 ­ ­ 0.3 0.3 Vision + Industrial & Consumer Products FY00 0.0 ­ ­ ­ ­ ­ 0.5 0.5 Botswana Abercrombie & Kent Botswana Accommodation & Tourism Services FY00, 01 2.8 ­ 2.4 ­ 2.4 (Proprietary) Limited Kalahari Diamonds Limited Oil, Gas, & Mining FY03 2.0 ­ ­ 2.0 2.0 2.4 2.0 4.4 Burundi Florex Limited Agriculture & Forestry FY02 0.3 ­ 0.4 ­ 0.4 Vegetables and Flowers Exports S.A. Agriculture & Forestry FY01 0.5 ­ 0.6 ­ 0.6 1.0 ­ 1.0 Cameroon Banque Internationale du Cameroun Finance & Insurance FY01 0.6 ­ ­ 0.9 0.9 Pour L'Épargne et le Crédit Cameroon Oil Transportation Company Oil, Gas, & Mining FY01 86.1 86.1 86.1 ­ 86.1 Complexe Avicole de Mvog-Betsi Agriculture & Forestry FY96 0.4 ­ 0.3 ­ 0.3 Cotonnière Industrielle Textiles, Apparel, & Leather FY86 6.1 ­ 4.5 ­ 4.5 du Cameroun (CICAM) FME-GAZ Chemicals FY02 0.3 ­ 0.3 ­ 0.3 Horizon Bilingual Education Complex Education Services FY01 0.3 ­ 0.4 ­ 0.4 Notacam S.A. Textiles, Apparel, & Leather FY97 0.9 ­ 0.8 ­ 0.8 Orange Cameroun S.A. Information FY02 0.9 ­ ­ ­ ­ Pecten Cameroon Company Oil, Gas, & Mining FY92, 96, 97, 98, 03 115.0 236.6 44.0 ­ 44.0 Société Agro-Industrielle et Agriculture & Forestry FY00 0.4 ­ 0.2 ­ 0.2 Commerciale du Cameroun Société de Transports et Négoces Transportation & Warehousing FY03 0.8 ­ 0.8 ­ 0.8 du Cameroun SARL 137.6 0.9 138.5 Cape Verde Caixa Económica de Cabo Verde, S.A. Finance & Insurance FY04 6.1 ­ 6.1 ­ 6.1 Growela Cabo Verde, Lda Textiles, Apparel, & Leather FY94 1.0 ­ 0.2 ­ 0.2 6.2 ­ 6.2 Chad Finadev Tchad Finance & Insurance FY03 0.2 ­ ­ 0.2 0.2 Tchad Oil Transportation Oil, Gas, & Mining FY01 13.9 13.9 13.9 ­ 13.9 Company S.A. (TOTCO) 13.9 0.2 14.1 Congo, Democratic Republic of Celtel Democratic Republic of Congo Information FY00, 03 27.0 ­ 24.0 ­ 24.0 Grands Hôtels du Zaire, Z.S.A.R.L. Accommodation & Tourism Services FY85 15.0 ­ ­ 7.8 7.8 24.0 7.8 31.8 54 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Côte d'Ivoire Bank of Africa (Côte d'Ivoire) Finance & Insurance FY99, 03 0.2 ­ ­ 0.2 0.2 Cinergy, S.A. Utilities FY99 40.5 30.3 29.0 ­ 29.0 Compagnie Ivorienne de Production Utilities FY95 17.9 ­ 1.5 ­ 1.5 d'Électricité S.A. Drop Ivoire Food & Beverages FY99 1.3 ­ 1.4 ­ 1.4 Établissements R. Gonfreville, S.A. Textiles, Apparel, & Leather FY77, 87 10.7 ­ 1.5 1.7 3.2 Filature et Tissage Gonfreville Textiles, Apparel, & Leather FY96 ­ ­ 0.2 ­ 0.2 Industrial Promotion Services Collective Investment Vehicles FY88 0.9 ­ ­ 0.8 0.8 (Côte d'Ivoire) S.A. Multi Produits S.A. Wholesale & Retail Trade FY94, 97 0.8 ­ 0.1 0.4 0.5 Ocean Energy Côte d'Ivoire Ltd. Oil, Gas, & Mining FY93, 95, 96, 98 63.7 20.0 ­ 48.7* 48.7 Omnium Chimique et Cosmétique Food & Beverages FY87, 94, 97 9.1 ­ ­ 2.4 2.4 (COSMIVOIRE) S.A. Pétro Ivoire S.A. Utilities FY96, 00 2.0 ­ 1.0 ­ 1.0 S.G.I. Africaine de Bourse S.A. Finance & Insurance FY00 0.0 ­ ­ 0.0 0.0 Société Hôtelière de la Lagune Accommodation & Tourism Services FY00 2.1 ­ 1.6 0.4 2.1 Société Médicale de Moyens et Health Care FY01 1.2 ­ 1.6 ­ 1.6 d'Équipement Société pour le Développement Agriculture & Forestry FY97 2.8 ­ 3.9 ­ 3.9 Industriel de la Région d'Odienné Texicodi S.A. Textiles, Apparel, & Leather FY96 ­ ­ 0.3 ­ 0.3 Tropical Rubber Côte d'Ivoire Agriculture & Forestry FY99 3.5 ­ 2.4 ­ 2.4 44.5 54.6 99.1 Gabon Vaalco Energy, Inc. Oil, Gas, & Mining FY02 10.0 ­ 5.3 ­ 5.3 5.3 ­ 5.3 Gambia, The Kerr Kande Farm Limited II Agriculture & Forestry FY98 0.2 ­ 0.2 ­ 0.2 Kombo Beach Hotel Limited Accommodation & Tourism Services FY84 2.9 ­ 0.0 ­ 0.0 Lyefish Company Limited Food & Beverages FY95 0.4 ­ 0.4 ­ 0.4 Ndebaan Medi-Services Health Care FY94 0.2 ­ 0.2 ­ 0.2 Company Limited 0.8 ­ 0.8 Ghana Afariwaa Farms and Livestock Agriculture & Forestry FY94 0.4 ­ 0.2 ­ 0.2 Products Limited Antelope Company Ltd. Chemicals FY97 0.3 ­ 0.3 ­ 0.3 CAL Merchant Bank Limited Finance & Insurance FY90, 91, 93 8.9 ­ ­ 0.9 0.9 Diamond Cement Ghana Limited Nonmetallic Mineral Product FY02 6.0 ­ 4.5 1.0 5.5 Manufacturing Enterprise Life Assurance Finance & Insurance FY01 0.1 ­ ­ 0.1 0.1 Company Ltd. (ELAC) Ghana Aluminum Products Primary Metals FY92 0.4 ­ ­ 0.4 0.4 Limited (Ghanal) Ghana Printing and Packaging Pulp & Paper FY02 1.7 ­ 1.3 ­ 1.3 Industries Limited Ghanaian Australian Goldfields Limited Oil, Gas, & Mining FY90, 92, 96, 97 27.2 18.5 7.6 2.5 10.1 Network Computer Systems (NCS) Information FY98 0.7 ­ 0.5 ­ 0.5 PharmaCare Industries Company Limited Chemicals FY00 0.4 ­ 0.1 ­ 0.1 Professional Technical Services Limited Industrial & Consumer Products FY98 0.3 ­ 0.3 ­ 0.3 Shangri-La Hotel Accommodation & Tourism Services FY95 0.4 ­ 0.9 ­ 0.9 Sikaman Savings and Loan Finance & Insurance FY01 0.5 ­ ­ 0.5 0.5 Company Limited Tacks Farms Ghana Limited Agriculture & Forestry FY97 0.4 ­ 0.4 ­ 0.4 16.1 5.5 21.5 IFC 2004 ANNUAL REPORT 55 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Guinea Agro Investment Company S.A. Agriculture & Forestry FY98 0.2 ­ 0.2 ­ 0.2 Société Aurifère de Guinée S.A. Oil, Gas, & Mining FY88 8.3 ­ + ­ + Société Guinéenne d'Hôtellerie et Accommodation & Tourism Services FY95, 99 4.7 ­ 3.5 0.6 4.0 d'Investissements (SGHI) 3.6 0.6 4.2 Guinea-Bissau Agribissau SARL Agriculture & Forestry FY94 0.8 ­ ­ 0.1 0.1 Banco de Africa Ocidental, S.A.R.L. Finance & Insurance FY00 0.3 ­ ­ 0.3 0.3 ­ 0.4 0.4 Kenya AAA Growers Agriculture & Forestry FY00 0.5 ­ 0.5 ­ 0.5 AAR Health Services Limited Health Care FY98 0.5 ­ ­ 0.5 0.5 Allpack Industries Limited Pulp & Paper FY92 0.4 ­ ­ 0.4 0.4 Ceres Estates Limited Food & Beverages FY97 0.9 ­ 0.9 ­ 0.9 Deras Limited Textiles, Apparel, & Leather FY99 1.0 ­ 1.0 ­ 1.0 Diamond Trust of Kenya Limited Finance & Insurance FY82 1.0 ­ ­ 0.8 0.8 Equitea EPZ Company Ltd. Food & Beverages FY98 0.4 ­ 0.3 0.1 0.4 Gapco Kenya Wholesale & Retail Trade FY02 15.0 ­ 15.0 ­ 15.0 Grain Bulk Handlers Limited Transportation & Warehousing FY98 10.0 ­ 5.3 ­ 5.3 Industrial Promotion Services (Kenya) Transportation & Warehousing FY92 0.1 ­ ­ 0.1 0.1 Ltd.--Frigoken Ltd. Industrial Promotion Services (Kenya) Food & Beverages FY92 0.1 ­ ­ 0.1 0.1 Ltd.--Novaskins Tannery Limited Industrial Promotion Services (Kenya) Food & Beverages FY92 0.1 ­ ­ 0.1 0.1 Ltd.--Premiere Food Industries Ltd. International Hotels (Kenya) Limited Accommodation & Tourism Services FY95 6.0 ­ 3.4 ­ 3.4 K-Rep Bank Limited Finance & Insurance FY97, 99 1.4 ­ ­ 1.4 1.4 Kenya Airways Limited Transportation & Warehousing FY03 15.0 ­ 15.0 ­ 15.0 Leather Industries of Kenya Limited Textiles, Apparel, & Leather FY84, 92 1.4 ­ ­ 0.6 0.6 Lesiolo Grain Handlers Limited Transportation & Warehousing FY01 2.5 ­ 2.5 ­ 2.5 Locland Limited Agriculture & Forestry FY98 0.6 ­ 0.2 ­ 0.2 Mabati Rolling Mills Limited Industrial & Consumer Products FY00 11.5 ­ 9.0 ­ 9.0 Magadi Soda Company Ltd. Chemicals FY96, 04 35.0 ­ 26.0 ­ 26.0 Magana Flowers (K) Limited Agriculture & Forestry FY00 1.2 ­ 1.2 ­ 1.2 Makini School Limited Education Services FY97 0.5 ­ 0.2 ­ 0.2 Panafrican Paper Mills (E.A.) Limited Pulp & Paper FY70, 74, 77, 79, 81, 68.5 3.9 25.9 ­ 25.9 88, 90, 94, 96 Redhill Flowers (Kenya) Limited Agriculture & Forestry FY97 0.3 ­ 0.3 ­ 0.3 Tourism Promotion Services (KENYA) Ltd. Accommodation & Tourism Services FY72 1.6 0.8 ­ 0.0 0.0 Tsavo Power Company Ltd. Utilities FY00, 01 17.6 23.5 12.8 0.8 13.6 119.4 5.0 124.5 Liberia Liberian Agricultural Company Agriculture & Forestry FY00 3.5 ­ 1.1 ­ 1.1 1.1 ­ 1.1 Madagascar Aquaculture de la Mahajamba Food & Beverages FY92, 93, 96 6.4 ­ 0.1 0.6 0.7 (Aqualma) S.A. Bank of Africa Madagascar Finance & Insurance FY00 1.3 ­ 0.7 0.8 1.5 BNI-Crédit Lyonnais Madagascar Finance & Insurance FY92 2.6 ­ ­ 2.6 2.6 Cottonline S. A. Textiles, Apparel, & Leather FY04 5.0 ­ 5.0 ­ 5.0 Grands Hôtels de Madagascar Accommodation & Tourism Services FY98 1.0 ­ 0.7 ­ 0.7 Karibotel Accommodation & Tourism Services FY95 0.4 ­ 0.2 ­ 0.2 56 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Madagascar (continued) La Cotonniere D'Antsirabe Textiles, Apparel, & Leather FY86, 90 1.5 ­ ­ 0.2 0.2 (Cotona), S.A. Les Pêcheries de Nossi Be, S.A. Agriculture & Forestry FY84, 90 5.7 ­ ­ 0.2 0.2 6.8 4.5 11.3 Malawi Kabula Hotel Limited Accommodation & Tourism Services FY00 0.6 ­ 0.6 ­ 0.6 Maravi Flowers Ltd. Agriculture & Forestry FY97 0.6 ­ 0.2 ­ 0.2 Mwaiwathu Private Hospital Limited Health Care FY97 0.8 ­ ­ 0.8 0.8 National Insurance Company Finance & Insurance FY00 1.0 ­ ­ 1.2 1.2 Limited (NICO) 0.9 2.0 2.9 Mali Établissement Zoumana Traore Suarl Transportation & Warehousing FY99 ­ ­ 0.3 ­ 0.3 Graphique Industrie S.A. Pulp & Paper FY99 + ­ 0.5 ­ 0.5 Groupement des Grands Industrial & Consumer Products FY97 0.7 ­ 0.7 ­ 0.7 Garages de Bamako Hôtel Le Rabelais Accommodation & Tourism Services FY99 ­ ­ 0.1 ­ 0.1 Imprim Color Information FY00 0.0 ­ ­ ­ ­ La Société d'Exploitation des Mines Oil, Gas, & Mining FY95 39.8 25.0 ­ 4.8 4.8 d'Or de Sadiola S.A. (SEMOS) Société Industrielle d'Emballage Plastics & Rubber FY99 0.3 ­ 0.3 ­ 0.3 et de Conditionnement Société Malienne de Promotion Hôtelière Accommodation & Tourism Services FY94, 98, 03 4.3 ­ 2.3 ­ 2.3 Timbuktu Trading and Transport Transportation & Warehousing FY98 0.1 ­ 0.2 ­ 0.2 4.4 4.8 9.2 Mauritania Générale de Banque de Mauritanie Finance & Insurance FY98, 00, 04 21.1 ­ 15.3 ­ 15.3 pour l'Investissement et le Commerce TIVISKI S.A.R.L. Food & Beverages FY99 + ­ 0.5 ­ 0.5 15.7 ­ 15.7 Mauritius Mauritius Venture Capital Fund Limited Collective Investment Vehicles FY96 1.6 ­ ­ 0.4 0.4 Socota Textile Mills Limited Textiles, Apparel, & Leather FY87 6.0 ­ ­ 1.0 1.0 ­ 1.4 1.4 Mozambique Ausmoz Farm Holdings, Lda. Agriculture & Forestry FY01 0.7 ­ 0.7 ­ 0.7 Auto Body Grand Prix Lda Industrial & Consumer Products FY03 0.4 ­ 0.6 ­ 0.6 Banco de Microfinanças Finance & Insurance FY01, 03 0.4 ­ ­ 0.4 0.4 de Moçambique (BMF) BIMI­Banco de Investimento, SARL Finance & Insurance FY99 0.3 ­ ­ 0.3 0.3 Cabo Caju, Lda. Food & Beverages FY00 0.6 ­ 0.6 ­ 0.6 Companhia De Pescas da Zambezia Lda Food & Beverages FY98 1.0 ­ 1.0 ­ 1.0 Complexo Turistico Oasis de Xai-Xai, Lda Accommodation & Tourism Services FY98 0.7 ­ 0.7 ­ 0.7 Empresa Nacional de Hidrocarbonetos Oil, Gas, & Mining FY04 18.5 ­ ­ 18.5 18.5 de Moçambique Maragra Acucar SARL Food & Beverages FY00 10.3 ­ 10.3 ­ 10.3 Mozambique Aluminum Primary Metals FY98, 01 121.3 ­ 111.4 ­ 111.4 S.A.R.L. (MOZAL) Rodoviária da Beira Limitida Transportation & Warehousing FY99 0.2 ­ 0.2 ­ 0.2 125.5 19.2 144.7 IFC 2004 ANNUAL REPORT 57 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Namibia Life Office of Namibia Limited Finance & Insurance FY98, 01 1.6 ­ ­ 1.6 1.6 Novanam Limited Agriculture & Forestry FY95, 97, 98, 03 19.4 ­ 12.8 ­ 12.8 12.8 1.6 14.4 Nigeria Abuja International Diagnostic Health Care FY97 2.5 ­ 1.8 0.7 2.5 and Medical Center Adamac Industries Limited Oil, Gas, & Mining FY03 25.0 15.0 25.0 ­ 25.0 Andchristie Company Limited Information FY97 0.2 ­ 0.1 ­ 0.1 Ansbby Nigeria Limited Chemicals FY99 0.1 ­ 0.1 ­ 0.1 Arewa Textiles, Ltd. Textiles, Apparel, & Leather FY64, 67, 70, 92 6.6 0.7 ­ + + Capital Alliance Private Equity Collective Investment Vehicles FY00 7.5 ­ ­ 7.5 7.5 (Mauritius), Ltd. Citibank Nigeria Finance & Insurance FY01 10.0 ­ 6.4 ­ 6.4 Diamond Bank Finance & Insurance FY01 20.0 ­ 10.0 ­ 10.0 FSB International Bank Finance & Insurance FY01 22.5 ­ 20.7 ­ 20.7 First Securities Discount House Finance & Insurance FY93 0.9 ­ ­ 0.9 0.9 Global Fabrics Manufacturers Limited Textiles, Apparel, & Leather FY00 0.3 ­ 0.3 ­ 0.3 Guaranty Trust Bank Plc. Finance & Insurance FY01, 04 40.0 ­ 34.0 ­ 34.0 Hercules Tyres Manufacturing Plastics & Rubber FY00 1.3 ­ 1.3 ­ 1.3 Nigeria Limited Hygeia Nigeria Limited Health Care FY00 0.6 ­ ­ 0.2 0.2 Ikeja Hotel Limited Accommodation & Tourism Services FY81, 85, 88 12.6 ­ ­ 1.5 1.5 Investment Banking and Trust Finance & Insurance FY01 20.0 ­ 20.0 ­ 20.0 Company Limited Mid-East Nigeria Limited Nonmetallic Mineral Product FY96 0.1 ­ 0.1 ­ 0.1 Manufacturing The Moorhouse Company Limited Accommodation & Tourism Services FY98 1.4 ­ 0.6 ­ 0.6 Niger Delta Contractor Finance & Insurance FY02 15.0 ­ 15.0 ­ 15.0 Revolving Credit Facility Oha Motors (Nigeria) Limited Transportation & Warehousing FY01 0.9 ­ 0.8 ­ 0.8 Radmed Diagnostic Center Limited Health Care FY98 0.3 ­ 0.1 ­ 0.1 Safety Center International Limited Education Services FY01 0.6 ­ 0.5 0.1 0.6 United Bank for Africa (plc) Finance & Insurance FY02, 04 10.0 ­ 10.0 ­ 10.0 UPDC Hotels Ltd Accommodation & Tourism Services FY04 11.0 ­ 11.0 ­ 11.0 Vinfessen Industries Limited Plastics & Rubber FY96 1.0 ­ 1.0 ­ 1.0 158.8 10.8 169.6 Rwanda Société Rwandaise des Allumettes Industrial & Consumer Products FY88 1.2 ­ 1.0 0.2 1.2 (SORWAL), S.A.R.L. 1.0 0.2 1.2 Senegal African Seafood, S.A. Food & Beverages FY86 2.4 ­ 1.5 ­ 1.5 Banque de L'Habitat du Sénégal S.A. Finance & Insurance FY80 0.4 ­ ­ 0.5 0.5 Ciments du Sahel S.A. Nonmetallic Mineral Product FY00 17.5 ­ 17.6 2.3 19.8 Manufacturing Groupe Scolaire Fanaicha Education Services FY99 0.3 ­ 0.4 ­ 0.4 GTi Dakar LLC Utilities FY98 12.3 11.6 8.7 1.7 10.3 Royal Saly S.A. Accommodation & Tourism Services FY02 1.0 ­ 1.4 ­ 1.4 Société d'Exploitation des Food & Beverages FY96, 97, 99 1.4 ­ ­ 0.4 0.4 Ressources Thoniéres 29.5 4.8 34.3 58 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Seychelles Acajoux Hotel Accommodation & Tourism Services FY95 1.0 ­ 0.1 ­ 0.1 Coral Strand Hotel Accommodation & Tourism Services FY96 3.6 ­ 0.8 ­ 0.8 Seychelles International Mercantile Finance & Insurance FY99 10.0 ­ 1.0 ­ 1.0 Banking Corporation Limited 1.9 ­ 1.9 Sierra Leone Celtel SierraLeone Information FY00 4.0 ­ 2.3 ­ 2.3 2.3 ­ 2.3 South Africa AEF Bulwer Timber Ltd. Industrial & Consumer Products FY99 ­ ­ ­ 0.2 0.2 African Bank Limited Finance & Insurance FY02, 04 16.6 ­ 32.0 ­ 32.0 African Life Assurance Company Limited Finance & Insurance FY95, 96, 99 21.5 ­ ­ 17.8 17.8 The Biotech Venture Partners Fund Collective Investment Vehicles FY02 1.8 ­ ­ 2.6 2.6 Carosa Farm (PTY) Limited Agriculture & Forestry FY97 0.6 ­ 0.1 0.1 0.2 Cheiron Health Technologies Professional, Scientific, & Technical FY00 1.3 ­ 0.2 0.6 0.8 (Pty) Ltd Services Dargle Timber (Pty) Limited/Bulwer Industrial & Consumer Products FY99 0.6 ­ 0.4 ­ 0.4 Timber (Pty) Limited Decentralised Banking Solutions Information FY00 0.8 ­ ­ 0.8 0.8 Consult (Pty) Limited Edu-Loan (Pty) Ltd. Finance & Insurance FY02 1.9 ­ 2.5 ­ 2.5 Eerste River Medical Center Health Care FY98 1.0 ­ ­ 1.0 1.0 Foxtrot Meat Processors CC Food & Beverages FY99 0.5 ­ 0.4 ­ 0.4 Hernic Ferrochrome Pty Limited Oil, Gas, & Mining FY04 30.4 ­ 26.9 4.7 31.6 Mvelaphanda Gold (Pty) Limited Oil, Gas, & Mining FY04 27.7 ­ 29.6 0.0 29.6 New Africa Mining Fund Collective Investment Vehicles FY03 5.0 ­ ­ 5.0 5.0 Printability Pulp & Paper FY01 6.9 ­ 6.2 3.9 10.0 Rubico Holding SA (Pty) Ltd. Information FY01, 02 6.3 ­ 1.2 + 1.2 South Africa Capital Growth Fund, Ltd. Collective Investment Vehicles FY96 20.0 ­ ­ + + South Africa Franchise Collective Investment Vehicles FY95 2.8 ­ ­ 1.2 1.2 Equity Fund Limited South Africa Home Loans Finance & Insurance FY00, 01, 02, 03, 04 11.2 ­ 2.4 7.0 9.4 South Africa Private Equity Fund III, L.P. Collective Investment Vehicles FY99 35.0 ­ ­ 27.2 27.2 Spier Estate Hotel Accommodation & Tourism Services FY02 12.0 ­ 17.1 1.9 18.9 Tusk Project Management (Pty) Ltd Professional, Scientific, & Technical FY01 1.8 ­ 1.8 0.1 1.9 Services 120.8 74.1 194.8 Sudan Cotton Textile Mills, Ltd Textiles, Apparel, & Leather FY76 8.7 ­ 8.7 ­ 8.7 Gezira Managil Textile Company Limited Textiles, Apparel, & Leather FY78 6.5 ­ 6.6 ­ 6.6 15.3 ­ 15.3 Swaziland Natex Swaziland Limited Textiles, Apparel, & Leather FY85, 88, 93 13.9 ­ ­ 0.0 0.0 The Royal Swaziland Sugar Food & Beverages FY78, 86 9.7 ­ ­ 0.5 0.5 Corporation Limited Swazi Paper Mills Ltd. Pulp & Paper FY95, 02 8.8 ­ 5.7 ­ 5.7 Swazi Wattle Industries (Pty) Ltd Chemicals FY01 1.1 ­ 0.9 0.2 1.1 Swaziland Industrial Development Finance & Insurance FY87, 93 3.6 ­ ­ 1.0 1.0 Company Limited 6.6 1.8 8.4 IFC 2004 ANNUAL REPORT 59 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Tanzania, United Republic of 2000 Industries Limited Food & Beverages FY02 1.6 ­ 1.5 ­ 1.5 Aquva Ginners Tanzania Ltd Agriculture & Forestry FY97 0.8 ­ 0.7 ­ 0.7 Boundary Hill Lodge Limited Accommodation & Tourism Services FY01 0.2 ­ 0.2 ­ 0.2 Exim Bank of Tanzania Finance & Insurance FY02 3.5 ­ 3.5 ­ 3.5 Indian Ocean Hotel Limited Accommodation & Tourism Services FY00 2.5 ­ 2.5 ­ 2.5 International House Property Limited Construction & Real Estate FY97 2.3 ­ 0.4 0.6 1.0 Maji Masafi Limited Food & Beverages FY98 1.1 ­ 0.2 ­ 0.2 Moshi Leather Industries Ltd, Tanzania Textiles, Apparel, & Leather FY95 0.2 ­ ­ 0.2 0.2 National Bank of Commerce (NBC) Finance & Insurance FY01 10.0 ­ ­ 10.0 10.0 Tanzania Breweries Limited Food & Beverages FY95 6.0 ­ ­ 6.0 6.0 Tourism Promotion Services Accommodation & Tourism Services FY94 8.9 ­ 5.4 0.9 6.3 (Tanzania) Limited Tourism Promotion Services, Accommodation & Tourism Services FY95, 99 1.4 ­ 0.5 0.2 0.7 (Zanzibar) Limited Zanzibar Safari Club Limited Accommodation & Tourism Services FY00 0.7 ­ 0.5 ­ 0.5 15.4 17.9 33.3 Togo West African Cement Nonmetallic Mineral Product FY00 5.9 ­ 2.0 1.2 3.3 Manufacturing 2.0 1.2 3.3 Uganda Agro Management Limited Chemicals FY96 1.0 ­ 0.6 0.4 1.0 CelTel Limited (Uganda) Information FY95, 01 10.3 ­ 0.5 ­ 0.5 Clovergem Fish and Foods Limited Food & Beverages FY93 1.0 ­ 0.8 ­ 0.8 Conrad Plaza Limited Construction & Real Estate FY97 1.5 ­ 0.6 ­ 0.6 Development Finance Company Finance & Insurance FY85, 93, 95 1.0 ­ ­ 1.3 1.3 of Uganda Limited Executive Investments Limited Construction & Real Estate FY98 1.0 ­ 0.5 ­ 0.5 Gomba Fishing Industries Limited Agriculture & Forestry FY99 1.4 ­ 0.5 ­ 0.5 Ladoto Ginners Limited Agriculture & Forestry FY00 0.8 ­ 0.8 ­ 0.8 Mosa Court Apartments Limited Construction & Real Estate FY98 0.8 ­ 0.1 ­ 0.1 Sugar Corporation of Uganda Limited Food & Beverages FY84 10.4 ­ 1.7 ­ 1.7 Tilda (Uganda) Limited Agriculture & Forestry FY99 1.9 ­ 1.0 ­ 1.0 White Nile Dairies (Uganda) Limited Food & Beverages FY99 0.3 ­ 0.1 ­ 0.1 7.3 1.7 9.0 Zambia Africa Plantations Company Limited Agriculture & Forestry FY00 2.5 ­ 1.0 ­ 1.0 and African Highlands Plantations Company Limited Amaka Cotton Ginneries Limited Agriculture & Forestry FY99 1.3 ­ 1.3 ­ 1.3 Celtel Zambia Limited Information FY99, 00, 04 9.1 ­ 3.9 1.3 5.2 Chingola Hotel Accommodation & Tourism Services FY02 1.0 ­ 0.8 ­ 0.8 Drilltech Engineering Limited Oil, Gas, & Mining FY99 0.2 ­ 0.1 0.2 0.3 Esquire Roses Farm Limited Agriculture & Forestry FY00 0.5 ­ 0.2 ­ 0.2 JY Estates Limited Agriculture & Forestry FY98 0.9 ­ 0.9 ­ 0.9 Marasa Holdings Limited Accommodation & Tourism Services FY01 4.6 ­ 3.9 ­ 3.9 Michelangelo Executive Lodge Limited Accommodation & Tourism Services FY02 0.2 ­ 0.2 ­ 0.2 National Insurance Company Finance & Insurance FY99 0.3 ­ ­ 0.1 0.1 (Zambia) Limited Zambia Bata Shoe Company Limited Textiles, Apparel, & Leather FY72, 73 1.1 1.1 ­ 0.2 0.2 12.1 1.7 13.9 60 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SUB-SAHARAN AFRICA Zimbabwe Agflora (PVT) Limited Agriculture & Forestry FY97 0.2 ­ 0.2 ­ 0.2 Bell Medical Centers Limited Health Care FY00 0.8 ­ ­ 0.8 0.8 Belvedere Nursing Home (PVT) Ltd. Health Care FY99 0.2 ­ ­ 0.2 0.2 Commercial Bank of Zimbabwe Limited Finance & Insurance FY98 26.8 ­ 10.0 ­ 10.0 Deraswiss Zimbabwe (Pvt) Ltd. Textiles, Apparel, & Leather FY00 1.0 ­ 1.2 ­ 1.2 Hy-Veld Holdings (Pvt) Limited and Food & Beverages FY99 1.3 ­ 1.0 ­ 1.0 Extraction Incorporated (Pvt) Limited Isfar (Pvt) Limited Textiles, Apparel, & Leather FY97 0.1 ­ 0.1 ­ 0.1 Itachi Plastics (PVT) Limited Plastics & Rubber FY96 0.4 ­ 0.3 0.1 0.3 Lowveld Leather (PVT) Limited Textiles, Apparel, & Leather FY97 0.5 ­ 0.3 0.2 0.5 Shagelok Chemicals (Pvt) Ltd. Chemicals FY97 1.1 ­ 0.9 0.2 1.0 Stone One Holdings Limited, Zimbabwe Oil, Gas, & Mining FY96 1.5 ­ 1.4 ­ 1.4 Trinidad Industries (Pty) Ltd. Chemicals FY97 1.5 ­ 0.1 0.6 0.6 UDC Limited Finance & Insurance FY85, 87, 89, 96, 00 14.6 ­ 0.6 ­ 0.6 Victoria Falls Safari Lodge Hotel (PVT.) Ltd Accommodation & Tourism Services FY94 2.7 ­ ­ 0.2 0.2 Zambezi Fund Collective Investment Vehicles FY97 2.5 ­ ­ 0.5 0.5 16.0 2.8 18.8 Regional Investment Africa Banking Corp Finance & Insurance FY90, 92, 02 3.0 ­ ­ 3.0 3.0 The Africa Emerging Markets Funds Collective Investment Vehicles FY94 7.5 ­ ­ 7.5 7.5 Africa International Financial Collective Investment Vehicles FY03 20.0 ­ ­ 20.0 20.0 Holdings, LLC Africa Media Group Limited Information FY02, 04 5.2 ­ ­ + + Africa Microfinance Ltd. Collective Investment Vehicles FY02 2.0 ­ ­ 2.0 2.0 The AIG African Infrastructure Collective Investment Vehicles FY00 74.8 ­ ­ 72.5 72.5 Fund L.L.C. AIG African Infrastructure Collective Investment Vehicles FY00 0.2 ­ ­ 0.2 0.2 Management LLC Aureos East Africa Fund, LLC Collective Investment Vehicles FY03 4.0 ­ ­ 4.0 4.0 Aureos Southern Africa Fund, LLC Collective Investment Vehicles FY03 6.0 ­ ­ 6.0 6.0 Celtel International BV. Information FY00, 02 30.0 ­ ­ 30.0 30.0 Coca Cola SABCO (Pty) Ltd. Food & Beverages FY02 20.0 ­ 10.0 10.0 20.0 Ecobank Transnational Incorporated Finance & Insurance FY99 7.5 ­ 0.1 ­ 0.1 Energy Africa Limited Oil, Gas, & Mining FY96 ­ ­ ­ 38.0 38.0 Framlington Asset Management Collective Investment Vehicles FY99 0.0 ­ ­ 0.0 0.0 West Africa SA Industrial Promotion Services Collective Investment Vehicles FY82, 04 5.8 ­ ­ 5.7 5.7 (Kenya) Limited Mobile Telephone Networks Nigeria Information FY04 100.0 ­ 85.0 15.0 100.0 Communications Limited Osprey Oil and Gas Limited Oil, Gas, & Mining FY03 0.3 ­ ­ 0.3 0.3 Pan African Investment Partners Ltd. Collective Investment Vehicles FY04 15.0 ­ ­ 15.0 15.0 West Africa Growth Fund Collective Investment Vehicles FY97 6.4 ­ ­ 3.9 3.9 West Africa Trade Enhancement Facility Finance & Insurance FY03 ­ ­ ­ ­ ­ 95.1 233.1 328.1 Total equity and loans 1,034.7 453.7 1,488.4 Total structured finance (including guarantees) and risk management products 107.5 Total IFC portfolio for Sub­Saharan Africa 1,595.9 IFC 2004 ANNUAL REPORT 61 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EAST ASIA AND THE PACIFIC Cambodia ACLEDA Finance & Insurance FY00, 04 7.6 ­ 6.0 1.6 7.6 Princiere Resorts Limited Accommodation & Tourism Services FY03 1.2 ­ 1.1 ­ 1.1 SEF Hagar Soya Food & Beverages FY03 0.5 ­ ­ 0.5 0.5 Société Concessionaire de l'Aéroport Transportation & Warehousing FY04 10.0 ­ 10.0 ­ 10.0 17.1 2.1 19.2 China Anjia Group Holdings Finance & Insurance FY04 2.0 ­ ­ 2.0 2.0 Asian Strategic Investments Industrial & Consumer Products FY04 10.0 ­ ­ 10.0 10.0 Corporation Group ASIMCO International Casting Industrial & Consumer Products FY00 19.0 ­ 15.4 ­ 15.4 (Shanxi) Co., Ltd Bank of Shanghai Finance & Insurance FY00, 02 50.3 ­ ­ 50.3 50.3 CDH China Fund, L.P. Collective Investment Vehicles FY02 20.0 ­ ­ 15.0 15.0 CSMC Technologies Corporation Industrial & Consumer Products FY04 12.0 ­ ­ 12.0 12.0 CSRC China Corporation Chemicals FY02 11.0 ­ 8.3 2.0 10.3 CUNA Mutual Group Finance & Insurance FY04 12.0 ­ ­ 12.0 12.0 Changjiang BNP Paribas Peregrine Finance & Insurance FY03 11.6 ­ ­ 11.6 11.6 Securities Co., Ltd. Chengdu Huarong Chemical Chemicals FY99 10.6 8.6 5.6 3.2 8.8 Company Limited Chengxin International Finance & Insurance FY99 0.4 ­ ­ 0.2 0.2 Credit Ratings Limited China II Ltd. Finance & Insurance FY04 28.0 ­ 28.0 ­ 28.0 China Dynamic Growth Fund, L.P. Collective Investment Vehicles FY94 12.4 ­ ­ 7.9 7.9 China Green Energy Limited Utilities FY04 20.0 ­ 20.0 ­ 20.0 China Huarong Asset Finance & Insurance FY02 34.5 ­ 9.0 2.5 11.5 Management Corporation China Minsheng Banking Corp., Ltd. Finance & Insurance FY03 23.5 ­ ­ 23.5 23.5 China Re Life Finance & Insurance FY04 15.3 ­ ­ 15.4 15.4 China Walden Management Limited Collective Investment Vehicles FY94 0.0 ­ ­ 0.0 0.0 China Walden Ventures Collective Investment Vehicles FY94 7.5 ­ ­ 0.0 0.0 Investment Limited Dupont Suzhou Polyester Co. Ltd. Textiles, Apparel, & Leather FY96 29.1 52.0 6.2 + 6.2 Global Infotech Holdings, Inc. Information FY03 3.5 ­ ­ 3.5 3.5 Guangxi Fenglin Forestry Industrial & Consumer Products FY04 21.0 18.0 15.0 6.0 21.0 Development Co. Ltd. Industrial Bank Finance & Insurance FY04 52.2 ­ ­ 52.2 52.2 Interstate Energy Corporation Pte, Ltd. Utilities FY02 20.0 ­ 20.0 ­ 20.0 Jiangxi Chenming Paper Co. Ltd. Pulp & Paper FY04 12.9 ­ ­ 12.9 12.9 Jilin Huazheng Agribusiness Food & Beverages FY03 15.0 7.0 15.0 ­ 15.0 Development Co., Ltd. Nanjing City Commercial Bank Finance & Insurance FY02 26.6 ­ ­ 26.6 26.6 Nanjing Kumho Tire Co., Ltd. Plastics & Rubber FY96, 04 53.7 38.8 34.0 6.0 40.0 New China Life Insurance Company Finance & Insurance FY01 30.7 ­ ­ 30.7 30.7 Newbridge Investment Partners, L.P. Collective Investment Vehicles FY95 6.7 ­ ­ 2.0 2.0 Ningxia Darong Chemicals Chemicals FY04 11.5 8.0 10.0 1.5 11.5 & Metallurgy Co. Ltd. Orient Finance Company Finance & Insurance FY97 10.0 20.0 5.7 ­ 5.7 Peak Pacific Investment Company Ltd. Utilities FY02 25.0 ­ 25.0 ­ 25.0 Plantation Timber Products Industrial & Consumer Products FY00 1.5 ­ ­ 2.5 2.5 Holdings Limited SEAF Sichuan SME Investment Fund LLC Collective Investment Vehicles FY01 4.5 ­ ­ 4.5 4.5 SYWG BNP Paribas Asset Finance & Insurance FY03 1.9 ­ ­ 1.9 1.9 Management Co. Ltd. Scana Leshan Machinery Co., Ltd. Primary Metals FY99 5.9 ­ 3.6 1.4 5.0 Shanghai International Banking Education Services FY04 0.1 ­ ­ 0.1 0.1 & Finance Institute Shanghai Krupp Stainless Co., Ltd. Primary Metals FY00 30.0 68.8 26.3 ­ 26.3 62 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EAST ASIA AND THE PACIFIC China (continued) Shanghai Midway Infrastructure Transportation & Warehousing FY99 ­ ­ ­ 16.0 16.0 (Holdings), Ltd. Shanxi Antai Group Corporation Primary Metals FY04 40.0 ­ 40.0 ­ 40.0 Shenzhen China Bicycles Industrial & Consumer Products FY88, 92, 94 20.9 ­ 4.5 ­ 4.5 Company (Holdings) Limited Shenzhen Tai­Yang PCCP, Nonmetallic Mineral Product FY93 5.0 ­ 3.8 + 3.8 Company Limited Manufacturing Sino Gold Limited Oil, Gas, & Mining FY03 5.0 ­ ­ 4.0 4.0 Sino­Forest Corporation Industrial & Consumer Products FY02 25.0 ­ 21.7 ­ 21.7 Southern Aluminum Industry Primary Metals FY04 12.0 ­ 12.0 ­ 12.0 (China) Co., Ltd. Suzhou Huasu Plastics Co., Ltd. Chemicals FY97 24.5 22.2 ­ 2.5 2.5 Weihai Weidongri Comprehensive Food & Beverages FY96 4.9 0.9 0.7 ­ 0.7 Foodstuff Co., Ltd. Wumart Stores Wholesale & Retail Trade FY04 6.5 ­ ­ 6.5 6.5 Xi'an City Commercial Bank Finance & Insurance FY03 19.9 ­ ­ 19.9 19.9 Xinao Gas Holdings Limited Utilities FY04 35.0 ­ 25.0 10.0 35.0 Yangtze Special Opportunities Fund, L.P. Collective Investment Vehicles FY04 17.3 ­ ­ 17.3 17.3 Yangtze Special Situations Fund L.P. Collective Investment Vehicles FY04 1.0 ­ ­ 1.0 1.0 Yantai Mitsubishi Cement Nonmetallic Mineral Product FY93 30.7 ­ 4.7 ­ 4.7 Company Limited Manufacturing Zhong Chen Energy Storage Co. Ltd. Transportation & Warehousing FY04 5.0 ­ ­ 5.0 5.0 Zibo Wan Jie Tumor Hospital Health Care FY02 15.0 ­ 13.6 ­ 13.6 373.0 401.6 774.6 Fiji Hillview Limited Accommodation & Tourism Services FY99 3.9 ­ 5.5 ­ 5.5 5.5 ­ 5.5 Indonesia P.T. AdeS Alfindo Putrasetia Food & Beverages FY98 14.0 19.7 ­ 0.1 0.1 P.T. Agro Muko Food & Beverages FY91 12.7 ­ ­ 2.2 2.2 P.T. Astra Otoparts Tbk. Industrial & Consumer Products FY93 ­ ­ ­ 1.1 1.1 P.T. Bakrie Pipe Industries Primary Metals FY95 37.3 ­ 33.2 ­ 33.2 P.T. Berlian Laju Tanker Transportation & Warehousing FY98 28.2 25.2 6.0 15.2 21.1 P.T. Bina Danatama Finance Tbk. Finance & Insurance FY93, 96 20.0 35.0 4.5 1.8 6.3 P.T. Gawi Makmur Kalimantan Food & Beverages FY03 11.5 10.0 11.5 ­ 11.5 P.T. Indorama Synthetics Tbk. Textiles, Apparel, & Leather FY90, 91, 95, 99, 01, 98.8 67.5 3.3 11.8 15.1 03 P.T. Kia Keramik Mas Nonmetallic Mineral Product FY92, 94, 96 31.1 63.5 1.9 ­ 1.9 Manufacturing P.T. Nusantara Tropical Fruit Agriculture & Forestry FY93 8.6 6.7 7.6 ­ 7.6 P.T. South Pacific Viscose Chemicals FY93, 96, 04 54.5 60.0 24.8 ­ 24.8 PT Alumindo Light Metal Industry Tbk. Primary Metals FY97 15.0 20.0 8.7 ­ 8.7 PT Astra Graphia Tbk. Professional, Scientific, & Technical FY93 2.5 ­ ­ 2.0 2.0 Services PT Astra International, Tbk. Industrial & Consumer Products FY90, 91, 94, 03 36.9 ­ ­ 5.3 5.3 PT Asuransi Jiwa Manulife Indonesia Finance & Insurance FY88 0.3 ­ ­ 0.3 0.3 PT Bank Buana Indonesia Tbk Finance & Insurance FY03 15.4 ­ ­ 12.2 12.2 PT Ecogreen Oleochemicals Chemicals FY04 30.0 ­ 30.0 ­ 30.0 PT Grahawita Santika Accommodation & Tourism Services FY96 11.8 ­ 5.0 ­ 5.0 PT Kalimantan Sanggar Pusaka (KSP) Food & Beverages FY97 35.0 6.0 20.0 15.0 35.0 and Subsidiaries PT KDLC BancBali Finance Finance & Insurance FY94 16.2 ­ ­ + 0.0 PT KIA Serpih Mas Nonmetallic Mineral Product FY95 21.2 55.0 4.5 ­ 4.5 Manufacturing PT Megaplast Jayacitra Industrial & Consumer Products FY99 11.3 ­ 5.3 2.5 7.8 PT Prakrsa Alam Segar Food & Beverages FY04 35.0 ­ 35.0 ­ 35.0 PT Sahabat Mewah Dan Makmur Agriculture & Forestry FY03 12.0 ­ 12.0 ­ 12.0 IFC 2004 ANNUAL REPORT 63 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EAST ASIA AND THE PACIFIC Indonesia (continued) PT Samudera Indonesia Tbk. Transportation & Warehousing FY93 17.0 3.0 ­ 5.0 5.0 PT Sayap Mas Utama Chemicals FY98 10.0 20.0 4.2 ­ 4.2 PT Sigma Cipta Caraka Information FY01 3.0 ­ ­ 3.0 3.0 PT Sunson Textile Manufacturer Tbk. Textiles, Apparel, & Leather FY02 12.4 8.2 12.4 ­ 12.4 PT Wings Surya Chemicals FY98 8.7 21.3 3.6 ­ 3.6 PT. Asia Wisata Promosindo­IBIS Accommodation & Tourism Services FY91 ­ ­ 2.0 ­ 2.0 PT. Bank NISP Tbk. Finance & Insurance FY98, 01, 02, 04 53.6 ­ 35.0 13.6 48.6 PT. Makro Indonesia Wholesale & Retail Trade FY93, 00 1.3 ­ ­ 3.9 3.9 Verdaine Investment Limited Agriculture & Forestry FY03 14.0 ­ 14.0 ­ 14.0 284.5 94.9 379.4 Korea, Republic of Asset Korea Capital Collective Investment Vehicles FY99, 02 0.9 ­ ­ 0.9 0.9 Management Co. Ltd. Cheil Jedang Investment Finance & Insurance FY01 45.7 ­ 17.4 30.2 47.6 Trust & Securities Dae Chang Industrial Company Limited Primary Metals FY99 22.3 9.8 10.9 7.1 18.0 Halim & Co., Ltd. Food & Beverages FY99 20.0 ­ 14.0 5.1 19.1 Hana Bank Finance & Insurance FY71, 74, 76, 79, 80, 143.6 65.0 ­ 21.1 21.1 82, 89, 91, 94, 97, 98, 99, 03 Iljin Electric Co., Ltd. Industrial & Consumer Products FY99 15.0 ­ 4.5 ­ 4.5 KOMOCO MBS 2001­1 Finance & Insurance FY01 ­ ­ 15.6 ­ 15.6 Korea Growth and Restructuring Collective Investment Vehicles FY00 35.0 ­ ­ 33.8 33.8 Fund, L.P. Korea Mortgage Corporation Finance & Insurance FY01 98.0 ­ 29.5 8.8 38.3 Samgwang Gohachem Co., Ltd. Chemicals FY85 0.1 ­ ­ 0.1 0.1 Shinmoorim Paper Manufacturing Pulp & Paper FY99, 00 41.4 8.0 22.2 9.2 31.4 Company, Limited 114.1 116.4 230.5 Lao People's Democratic Republic Belmont Hotel Investments (Laos) Ltd. Accommodation & Tourism Services FY98, 01 1.2 ­ 0.9 ­ 0.9 Burapha Agro-forestry Company Ltd. Industrial & Consumer Products FY99 0.8 ­ + ­ + Endeavour Embroidery Co. Ltd. Textiles, Apparel, & Leather FY99 0.2 ­ 0.1 ­ 0.1 Villa Santi Accommodation & Tourism Services FY01 1.2 ­ 1.2 ­ 1.2 2.2 ­ 2.2 Mongolia Agricultural Bank of Mongolia Finance & Insurance FY04 3.0 ­ 1.8 1.2 3.0 G&M Industrial Co. Ltd. Textiles, Apparel, & Leather FY97 1.3 ­ + ­ + Trade & Development Bank of Mongolia Finance & Insurance FY04 5.0 ­ 3.5 1.5 5.0 XacBank Ltd. Finance & Insurance FY02 0.4 ­ 0.4 ­ 0.4 5.7 2.7 8.4 Philippines Alaska Milk Corporation Food & Beverages FY79 ­ ­ ­ 0.6 0.6 All AsiaCapital Growth Collective Investment Vehicles FY96 4.0 ­ ­ + + Venture BVI­I, Ltd. Asian Eye Institute Health Care FY03 1.0 ­ 1.0 ­ 1.0 Asian Hospital Inc. Health Care FY01 7.0 ­ 7.0 ­ 7.0 Asian Ventures Limited Collective Investment Vehicles FY96 0.0 ­ ­ + + Avalon Professional Web Trade Pte. Ltd. Information FY01, 02 1.6 ­ 0.7 1.0 1.7 Banco de Oro Universal Bank Finance & Insurance FY02 20.0 ­ 20.0 ­ 20.0 Eastwood Cyber One Corporation Professional, Scientific, & Technical FY02 20.0 ­ 20.0 ­ 20.0 Services Filinvest Alabang Inc. Wholesale & Retail Trade FY02 22.0 ­ 22.0 ­ 22.0 64 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EAST ASIA AND THE PACIFIC Philippines (continued) H&Q Philippines Holdings BVI, Inc. Collective Investment Vehicles FY99 5.8 ­ ­ 5.8 5.8 H&Q Philippines Ventures, Inc. Collective Investment Vehicles FY89 2.5 ­ ­ 0.6 0.6 H&Q Philippines Ventures II, Inc. Collective Investment Vehicles FY94 2.4 ­ ­ 1.1 1.1 Land Registration Systems, Inc. Professional, Scientific, & Technical FY04 24.7 ­ 22.0 2.7 24.7 Services Manila North Tollways Corporation Transportation & Warehousing FY02 46.0 ­ 46.0 ­ 46.0 Manila Water Company, Inc. Utilities FY03, 04 75.6 ­ 63.2 15.0 78.2 Mariwasa Manufacturing, Inc. Nonmetallic Mineral Product FY70, 72, 00 15.7 0.5 14.8 ­ 14.8 Manufacturing Marsman­Drysdale Agribusiness Food & Beverages FY99 15.0 8.8 10.0 ­ 10.0 Holdings, Inc. Micro Enterprise Bank, Finance & Insurance FY01 0.1 ­ ­ 0.1 0.1 A Thrift Bank Inc. Mirant Pagbilao Corporation Utilities FY93 70.0 11.0 18.0 10.0 28.0 Mirant Sual Corporation Utilities FY96 47.5 196.0 23.7 17.5 41.2 Northern Mindanao Power Corporation Utilities FY93 16.8 21.0 ­ 4.3 4.3 Pilipinas Shell Petroleum Corporation Chemicals FY93 40.3 65.9 ­ 1.6 1.6 PlantersBank Mortgage Securitization Finance & Insurance FY01 23.9 ­ ­ 8.7 8.7 Pryce Gases Incorporated Professional, Scientific, & Technical FY99 13.0 5.0 13.0 ­ 13.0 Services S&R Price Wholesale & Retail Trade FY02 12.5 ­ 12.5 ­ 12.5 SME.COM Information FY00 0.1 ­ ­ + + Software Ventures Int'l., Inc Professional, Scientific, & Technical FY03 4.0 ­ ­ 4.0 4.0 Services STRADCOM Corporation Transportation & Warehousing FY01 20.0 ­ 12.0 8.0 20.0 Union Cement Corporation Nonmetallic Mineral Product FY93 23.8 ­ ­ 5.6 5.6 Manufacturing Walden AB Ayala Management Co. Inc. Collective Investment Vehicles FY95 0.1 ­ ­ 0.1 0.1 Walden AB Ayala Ventures Co. Inc. Collective Investment Vehicles FY95 3.8 ­ ­ 0.6 0.6 305.8 87.2 393.0 Samoa MedCen Samoa Limited Health Care FY92 0.5 ­ + ­ + National Bank of Samoa Limited Finance & Insurance FY00 0.1 ­ 0.1 ­ 0.1 Wilex Cocoa Food & Beverages FY92 0.3 ­ 0.3 ­ 0.3 0.4 ­ 0.4 Thailand AJF Debt Facility 2010 Finance & Insurance FY04 40.0 ­ 40.0 ­ 40.0 Ayudhya Development Finance & Insurance FY92, 93, 96, 98 12.4 ­ 1.8 2.4 4.2 Leasing Company Limited Bangkok Mass Transit System Transportation & Warehousing FY97, 99 99.7 ­ 89.8 9.8 99.7 Public Company Limited Bona Vista School Education Services FY04 1.0 ­ 1.0 ­ 1.0 Bumrungrad Hospital Public Health Care FY94 ­ ­ ­ 0.6 0.6 Company Limited­BHPC Central Plaza Hotel Public Company Ltd. Accommodation & Tourism Services FY93 13.9 ­ ­ 13.9 13.9 Dhana Siam Finance and Securities Finance & Insurance FY94 30.0 ­ 2.2 ­ 2.2 Public Company Limited Fabrinet Thailand Industrial & Consumer Products FY04 3.0 ­ 3.0 ­ 3.0 HMC Polymers Company Limited Chemicals FY88, 96 19.0 11.0 ­ 3.9 3.9 Krung Thai IBJ Leasing Finance & Insurance FY92 0.4 ­ ­ 0.4 0.4 Company, Ltd. (KILC) Lombard Thailand Collective Investment Vehicles FY02 37.5 ­ ­ 35.9 35.9 Intermediate Fund, LLC. Medan National Plus School Education Services FY04 1.8 ­ 1.8 ­ 1.8 Siam Asahi Technoglass Co. Ltd. Industrial & Consumer Products FY90 7.0 ­ ­ 6.4 6.4 IFC 2004 ANNUAL REPORT 65 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EAST ASIA AND THE PACIFIC Thailand (continued) Star Petroleum Refining Chemicals FY94 100.0 350.0 61.6 ­ 61.6 Company Limited Thai Farmers Bank­Ladprao Health Care FY92 0.3 ­ ­ 0.3 0.3 General Hospital Co. Ltd. Thai Petrochemical Industry Chemicals FY97, 02 98.2 383.3 98.9 ­ 98.9 Public Company Limited True Corporation Public Information FY02 26.5 ­ 27.5 ­ 27.5 Company Limited Tuntex Petrochemicals Chemicals FY94 24.9 137.5 ­ 4.9 4.9 (Thailand) Public Co. Ltd. United Palm Oil Industry Food & Beverages FY88 ­ ­ ­ 1.1 1.1 Public Company Limited 327.6 79.6 407.2 Vietnam Allianz General Insurance Finance & Insurance FY03 1.3 ­ ­ 1.3 1.3 (Vietnam) Co. Ltd. Asia Commercial Bank Finance & Insurance FY03 5.0 ­ ­ 5.0 5.0 Dragon Capital Limited Collective Investment Vehicles FY03 2.0 ­ ­ 2.0 2.0 Franco­Vietnamese Hospital Health Care FY02 8.0 ­ 8.0 ­ 8.0 Glass Egg Digital Media Information FY03 1.8 ­ ­ 1.8 1.8 Global CyberSoft, Inc. Information FY02 1.3 ­ ­ 1.3 1.3 Nghi Son Cement Corporation Nonmetallic Mineral Product FY99 + + 14.9 ­ 14.9 Manufacturing RMIT International University Education Services FY02 7.3 ­ 7.3 ­ 7.3 Vietnam (RIUV) Saigon Thuong Tin Commercial Finance & Insurance FY03, 04 6.2 ­ ­ 6.1 6.1 Joint Stock Bank San Miguel Haiphong Glass Company Nonmetallic Mineral Product FY97 10.0 4.5 5.0 ­ 5.0 Manufacturing Vietnam Enterprise Investment Limited Collective Investment Vehicles FY02, 03 20.0 ­ 10.0 8.0 18.0 Vietnam International Leasing Finance & Insurance FY97 0.8 ­ ­ 0.8 0.8 Company Limited Vinh Phat Company Limited Textiles, Apparel, & Leather FY99 0.2 ­ 0.2 ­ 0.2 45.3 26.2 71.5 Regional Investment AIF Capital Limited Collective Investment Vehicles FY95, 98 0.1 ­ ­ 0.1 0.1 The Asian Infrastructure Fund Collective Investment Vehicles FY95 50.0 ­ ­ 36.6 36.6 Avenue Asia Special Situations Collective Investment Vehicles FY04 40.0 ­ ­ 39.9 39.9 Fund III, L.P. Kula Fund Limited Collective Investment Vehicles FY98 3.0 ­ ­ 1.5 1.5 SMELoan Finance & Insurance FY02 16.0 ­ 6.6 5.0 11.6 Vital Solutions Pte. Ltd. Information FY01 1.0 ­ ­ 1.0 1.0 6.6 84.1 90.7 Total equity and loans 1,487.9 894.7 2,382.6 Total structured finance (including guarantees) and risk management products 413.1 Total IFC portfolio for East Asia and the Pacific 2,795.7 66 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SOUTH ASIA Bangladesh BRAC Bank Finance & Insurance FY04 1.6 ­ ­ 1.6 1.6 DeltaBRAC Housing Finance Corporation Finance & Insurance FY98 3.0 ­ 2.3 0.7 3.0 Dynamic Textile Industries Limited Textiles, Apparel, & Leather FY92 2.5 2.0 1.9 ­ 1.9 GrameenPhone Limited Information FY00 18.2 ­ 6.7 ­ 6.7 GrameenPhone Limited Information FY04 30.0 ­ 30.0 ­ 30.0 HeidelbergCement Bangladesh Limited Nonmetallic Mineral Product FY01 10.0 ­ 8.6 ­ 8.6 Manufacturing Industrial Development Leasing Finance & Insurance FY85, 96 1.8 ­ ­ 0.1 0.1 Company of Bangladesh Limited Industrial Promotion and Development Finance & Insurance FY80, 99 11.1 ­ 5.6 ­ 5.6 Company of Bangladesh Limited Khulna Power Company Limited Utilities FY99 22.5 21.6 13.9 ­ 13.9 Lafarge Surma Cement Limited Nonmetallic Mineral Product FY02 45.0 15.0 35.0 10.0 45.0 Manufacturing R.A.K. Ceramics (Bangladesh) Pvt. Ltd. Nonmetallic Mineral Product FY03 12.0 ­ 12.0 ­ 12.0 Manufacturing 115.9 12.4 128.4 Bhutan Bhutan Resorts Corporation Limited Accommodation & Tourism Services FY04 10.0 ­ 10.0 ­ 10.0 10.0 ­ 10.0 India Alok Industries Limited Textiles, Apparel, & Leather FY03 17.5 ­ 17.5 ­ 17.5 Ambuj Cement Rajasthan Ltd. Nonmetallic Mineral Product FY94 19.4 17.0 ­ 4.9 4.9 Manufacturing The AMP-IndAsia India Fund LLC Collective Investment Vehicles FY01 15.0 ­ ­ 15.0 15.0 Apollo Tyres Limited Plastics & Rubber FY03 20.6 15.0 21.3 ­ 21.3 Arvind Mills Limited Textiles, Apparel, & Leather FY92 22.1 ­ ­ 5.7 5.7 Ballarpur Industries Limited Pulp & Paper FY01, 04 15.0 ­ 15.0 ­ 15.0 Balrampur Chini Mills Ltd. Food & Beverages FY03 14.9 ­ 15.2 ­ 15.2 Bharti Tele-Ventures Limited (BTVL) Information FY01 20.0 ­ ­ 10.0 10.0 Bhartiya Samruddhi Finance Limited Finance & Insurance FY01 1.0 ­ ­ 1.0 1.0 BHW-Birla Home Finance Limited Finance & Insurance FY04 21.2 ­ 20.9 ­ 20.9 Bihar Sponge Iron Limited Primary Metals FY85, 91 9.6 ­ 14.0 0.7 14.7 Cairn Energy PLC Oil, Gas, & Mining FY04 40.0 ­ 40.0 ­ 40.0 CEAT Capital Financial Services Limited Finance & Insurance FY97 20.0 ­ 19.6 ­ 19.6 Centurion Bank Ltd. Finance & Insurance FY95, 97 18.9 ­ ­ 0.8 0.8 CESC Limited Utilities FY91, 93 51.5 67.0 27.7 ­ 27.7 CMS Computers Information FY04 20.0 ­ 10.0 10.0 20.0 Continental Carbon India Limited Chemicals FY01, 04 9.0 11.5 9.0 ­ 9.0 Cosmo Films Limited Plastics & Rubber FY03 10.0 ­ 8.8 ­ 8.8 Crompton Greaves Ltd. Industrial & Consumer Products FY04 15.0 ­ 15.0 ­ 15.0 Dewan Housing Finance Corporation Ltd. Finance & Insurance FY03 12.0 ­ 12.3 ­ 12.3 DQ Entertainment Limited Information FY03 3.0 ­ 1.5 1.5 3.0 Eurolight Electricals Pvt. Ltd. Industrial & Consumer Products FY98 0.0 ­ ­ 0.0 0.0 GE Capital Transportation Finance & Insurance FY95 19.4 ­ ­ 4.4 4.4 Financial Services Ltd. Global Trade Finance (Pvt.) Limited Finance & Insurance FY01 2.5 ­ ­ 2.4 2.4 Global Trust Bank Limited Finance & Insurance FY94, 98, 00, 01 16.0 ­ 5.0 1.4 6.4 Gujarat Ambuja Cements Limited Nonmetallic Mineral Product FY94 25.8 ­ ­ 4.9 4.9 Manufacturing GVK Industries Limited Utilities FY96 37.5 45.5 ­ 7.5 7.5 Henkel SPIC India Ltd Chemicals FY95, 00 4.7 ­ ­ 4.7 4.7 Hole-in-the-Wall Education Limited Education Services FY02 1.6 ­ ­ 1.6 1.6 Housing Development Finance Finance & Insurance FY78, 87, 91, 93, 147.8 100.0 100.0 ­ 100.0 Corporation Limited 01, 03 IL&FS Venture Corporation Limited Collective Investment Vehicles FY93, 95 1.0 ­ ­ 1.0 1.0 IFC 2004 ANNUAL REPORT 67 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SOUTH ASIA India (continued) India Auto Ancillary Fund Collective Investment Vehicles FY99 2.3 ­ ­ 1.5 1.5 The India Direct Fund, L.P. Collective Investment Vehicles FY96 7.5 ­ ­ 6.9 6.9 India Lease Development Limited Finance & Insurance FY85, 90, 95 4.6 ­ ­ 0.9 0.9 Indian Infrastructure Equipment Limited Finance & Insurance FY02 3.2 ­ ­ 3.1 3.1 Indian Seamless Metal Tubes Limited Primary Metals FY01 10.5 ­ 10.5 ­ 10.5 Indo Rama Synthetics (India) Ltd. Textiles, Apparel, & Leather FY94, 96 56.8 ­ 7.9 ­ 7.9 Indo Rama Textiles Ltd Textiles, Apparel, & Leather FY92 ­ ­ ­ 0.7 0.7 Indus Investments Mauritius Limited Collective Investment Vehicles FY96 + ­ ­ + + Indus Venture Capital Fund I Collective Investment Vehicles FY92 1.2 ­ ­ 0.6 0.6 Indus Venture Investments Limited Collective Investment Vehicles FY96 5.0 ­ ­ 1.9 1.9 Indus Venture Management Limited Collective Investment Vehicles FY92 ­ ­ ­ 0.0 0.0 Information Technology Fund Collective Investment Vehicles FY94 0.6 ­ ­ 0.6 0.6 Infrastructure Development Finance Finance & Insurance FY98 15.5 ­ ­ 15.5 15.5 Company Limited Infrastructure Leasing and Financial Finance & Insurance FY91, 93, 95, 99 48.0 ­ ­ 8.0 8.0 Services Limited Ispat Industries Limited Primary Metals FY92, 95, 97 63.8 ­ 30.4 ­ 30.4 Jet Airways (India) Private Limited Transportation & Warehousing FY01 15.0 ­ ­ 15.0 15.0 Larsen & Toubro Construction & Real Estate FY03 50.0 ­ 50.0 ­ 50.0 Mahindra & Mahindra Financial Finance & Insurance FY02 17.2 ­ 18.3 ­ 18.3 Services Limited Mahindra & Mahindra Limited Industrial & Consumer Products FY81, 90, 93 28.8 ­ ­ 0.3 0.3 Mahindra Infrastructure Utilities FY01 10.0 ­ ­ 10.0 10.0 Developers Limited Mahindra Shubhlabh Services Limited Agriculture & Forestry FY03 2.2 ­ ­ 2.3 2.3 Max Healthcare Health Care FY04 19.6 ­ 19.6 ­ 19.6 Moser Baer India Limited Industrial & Consumer Products FY96, 99, 00 71.3 ­ 32.5 16.3 48.8 NewPath Ventures LLC Collective Investment Vehicles FY03, 04 13.0 ­ ­ 13.0 13.0 Nicco-Uco Financial Services Limited Finance & Insurance FY93, 96, 97, 98 6.5 ­ 1.9 0.5 2.4 Niko Resources Ltd. Oil, Gas, & Mining FY03 30.0 ­ 30.0 ­ 30.0 Orchid Chemicals & Chemicals FY01 20.0 ­ ­ 4.7 4.7 Pharmaceuticals Limited Owens Corning (India) Limited Nonmetallic Mineral Product FY97 25.0 ­ 11.6 ­ 11.6 Manufacturing Oxides and Specialties Limited Chemicals FY91 0.3 ­ ­ 0.0 + Powerlinks Transmission Limited Utilities FY04 74.6 ­ 74.0 ­ 74.0 Prism Cement Ltd. Nonmetallic Mineral Product FY95 20.0 15.0 11.3 5.0 16.3 Manufacturing Rain Calcining Limited Chemicals FY96 24.7 ­ ­ 3.8 3.8 RAK Ceramics India Pvt. Ltd. Nonmetallic Mineral Product FY04 20.0 ­ 20.0 ­ 20.0 Manufacturing South Asian Regional Apex Fund Collective Investment Vehicles FY96 7.3 ­ ­ 5.9 5.9 Spryance, Inc. Information FY01, 03 3.0 ­ ­ 3.0 3.0 SREI International Finance Limited Finance & Insurance FY98, 00 33.0 ­ 16.0 3.0 19.0 Steuerung Anlage Pvt. Ltd. Industrial & Consumer Products FY98 0.1 ­ ­ 0.1 0.1 Sundaram Finance Limited Finance & Insurance FY86, 93, 94, 95, 04 47.5 ­ 43.5 ­ 43.5 Sundaram Home Finance Limited Finance & Insurance FY00, 02 12.5 ­ 10.9 2.2 13.1 Switching Technologies Guenther Limited Industrial & Consumer Products FY87 ­ ­ 0.3 ­ 0.3 Tata Motors Limited Industrial & Consumer Products FY03 50.0 ­ 50.0 ­ 50.0 TCW/ICICI Private Equity Fund, L.L.C. Collective Investment Vehicles FY98 10.0 ­ ­ 3.9 3.9 The Technology Development and Collective Investment Vehicles FY91 2.8 ­ ­ 0.0 0.0 Information Company of India Limited UCAL Fuel System Industrial & Consumer Products FY90 0.6 ­ ­ 0.0 0.0 United Phosphorus Limited Chemicals FY04 17.5 ­ 17.5 ­ 17.5 United Riceland Limited Food & Beverages FY96 10.0 ­ 8.1 ­ 8.1 Usha Martin Limited Primary Metals FY03 24.6 ­ 21.0 3.6 24.6 Vysya Bank Finance & Insurance FY01 7.3 ­ ­ 3.7 3.7 68 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity SOUTH ASIA India (continued) Walden Nikko India Collective Investment Vehicles FY98 0.0 ­ ­ 0.0 0.0 Management Co. Ltd. Walden-Nikko India Ventures Co., L.D.C. Collective Investment Vehicles FY98 2.4 ­ ­ 2.0 2.0 Webdunia Information FY02 2.0 ­ ­ 2.0 2.0 WTI Advance Technology Limited Professional, Scientific, & Technical FY88 0.2 ­ ­ 0.2 0.2 Services 838.0 217.6 1,055.6 Maldives Maldives Finance Leasing Finance & Insurance FY02 4.3 ­ 3.0 1.3 4.3 Company Limited Taj Maldives (Pvt.) Ltd Accommodation & Tourism Services FY04 8.5 8.5 8.5 ­ 8.5 Villa Shipping and Trading Accommodation & Tourism Services FY96, 03 21.0 ­ 15.0 ­ 15.0 Company Private Limited 26.5 1.3 27.8 Nepal Bhote Koshi Power Company Utilities FY98 23.9 32.9 16.5 2.9 19.5 Private Limited Himal Power Limited Utilities FY96 32.0 ­ 25.6 ­ 25.6 International Leasing and Finance & Insurance FY01 0.3 ­ ­ 0.3 0.3 Finance Co., Ltd. Jomsom Mountain Resort (Pvt.), Ltd. Accommodation & Tourism Services FY98 4.0 ­ 4.0 ­ 4.0 46.1 3.2 49.4 Sri Lanka Asia Power (Private) Limited Utilities FY97 11.0 8.8 5.3 2.3 7.5 Commercial Bank of Ceylon Finance & Insurance FY03, 04 12.9 ­ ­ 12.8 12.8 Fitch Ratings Lanka Limited Finance & Insurance FY00 0.1 ­ ­ 0.1 0.1 Lanka Hospital Corporation Health Care FY01 1.1 ­ ­ ­ ­ Private Limited Mercantile Leasing Limited Finance & Insurance FY99 1.8 ­ ­ ­ ­ MTN Networks Limited Information FY04 50.0 ­ 50.0 ­ 50.0 National Development Bank Finance & Insurance FY00 1.3 ­ ­ 1.1 1.1 Housing Finance Co. Nations Trust Bank Finance & Insurance FY99, 01 1.1 ­ ­ 0.9 0.9 Packages Lanka (Private) Limited Pulp & Paper FY97 1.1 ­ ­ 1.1 1.1 South Asia Gateway Terminals Transportation & Warehousing FY00 28.6 ­ 19.9 3.6 23.5 (Private) Limited Suntel Limited Information FY01 7.5 ­ ­ 7.5 7.5 Taj Lanka Hotels Limited Accommodation & Tourism Services FY81, 82 8.5 10.2 ­ 0.6 0.6 75.1 30.0 105.1 Regional Investment Asia Opportunity Fund, L.P. Collective Investment Vehicles FY99 82.4 ­ ­ 58.8 58.8 Asian Mezzanine Infrastructure Fund Collective Investment Vehicles FY97 2.3 ­ ­ 0.8 0.8 Chase Asia Equity Advisors L.D.C. Collective Investment Vehicles FY99 + ­ ­ + + Modern Asia Environmental Holding Utilities FY04 15.0 ­ 15.0 ­ 15.0 SEAVI Venture Management Collective Investment Vehicles FY92 ­ ­ ­ + + (Bermuda) Limited 15.0 59.6 74.6 Total equity and loans 1,126.7 324.2 1,450.8 Total structured finance (including guarantees) and risk management products 162.7 Total IFC portfolio for South Asia 1,613.5 IFC 2004 ANNUAL REPORT 69 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Albania Anglo Albania Petroleum Limited Oil, Gas, & Mining FY98 28.5 ­ ­ 14.1* 14.1 Eurotech Cement, Shpk Nonmetallic Mineral Product FY99 1.2 ­ 0.4 ­ 0.4 Manufacturing Insurance Institute of Albania Finance & Insurance FY04 5.5 ­ ­ 6.1 6.1 National Commercial Bank Sh.A. Finance & Insurance FY00 2.0 ­ ­ 2.0 2.0 ProCredit Bank sh.a. Finance & Insurance FY00 1.1 ­ ­ 1.0 1.0 Vodafone Albania SH.A Information FY04 41.4 8.9 42.6 ­ 42.6 43.0 23.3 66.2 Armenia ACBA Leasing Finance & Insurance FY03 2.3 ­ 2.0 0.3 2.3 Armeconombank Finance & Insurance FY04 2.0 ­ 2.0 ­ 2.0 Armenia Hotel Closed Accommodation & Tourism Services FY01, 04 4.8 ­ ­ 4.8 4.8 Joint Stock Company 4.0 5.1 9.1 Azerbaijan Amerada Hess Corporation Oil, Gas, & Mining FY04 1.7 1.7 1.7 ­ 1.7 Azerbaijan Bank Finance & Insurance FY99, 04 1.0 ­ ­ 1.0 1.0 AzeriGazbank Finance & Insurance FY98, 03 1.6 ­ 1.2 ­ 1.2 Baku Coca-Cola Bottlers Ltd. Food & Beverages FY98 12.8 ­ 1.2 ­ 1.2 Baku Hotel Company Accommodation & Tourism Services FY00 17.5 ­ 7.3 ­ 7.3 BP Corporation NA, Inc Oil, Gas, & Mining FY04 10.0 10.0 10.0 ­ 10.0 Microfinance Bank Azerbaijan Finance & Insurance FY02 1.8 ­ ­ 1.8 1.8 Rabitabank Finance & Insurance FY98, 03 1.6 ­ 1.2 ­ 1.2 Statoil Oil, Gas, & Mining FY04 8.8 8.8 8.8 ­ 8.8 Unocal­Union Oil Oil, Gas, & Mining FY04 10.0 10.0 10.0 ­ 10.0 Company of California 41.3 2.8 44.0 Belarus Detroit Belarus Brewing Company Food & Beverages FY04 10.0 ­ 7.0 3.0 10.0 Priorbank Joint Stock Company Finance & Insurance FY03 14.0 ­ 14.0 ­ 14.0 21.0 3.0 24.0 Bosnia and Herzegovina Akova Impex, d.o.o. Food & Beverages FY99 2.1 ­ 1.0 ­ 1.0 Bosnalijek, d.d. Sarajevo Chemicals FY99, 01 4.5 ­ 1.5 1.8 3.4 Bosnia and Herzegovina­Wood Industrial & Consumer Products FY98 14.1 ­ 5.6 ­ 5.6 Sector Agency Credit Line Central Profit Banka Finance & Insurance FY02, 04 19.1 ­ 13.1 7.3 20.4 Fabrika Cementa Lukavac Nonmetallic Mineral Product FY03 9.8 2.4 12.2 ­ 12.2 Manufacturing Horizonte Bosnia and Collective Investment Vehicles FY98 1.9 ­ ­ 1.9 1.9 Herzegovina Enterprise Fund Konjuh d.d. Industrial & Consumer Products FY98 ­ ­ 2.7 ­ 2.7 Kozara d.d. Industrial & Consumer Products FY98 ­ ­ 2.0 ­ 2.0 Lijanovici d.o.o. Food & Beverages FY99 2.5 ­ 1.3 ­ 1.3 MDD Lignosper Industrial & Consumer Products FY98 2.3 ­ 2.6 ­ 2.6 Podgradci d.d. Industrial & Consumer Products FY98 ­ ­ 1.3 ­ 1.3 ProCredit Bank Finance & Insurance FY98, 99, 01, 03 4.2 ­ 3.6 1.2 4.9 Raiffeisen Bank Bosnia Finance & Insurance FY03 16.6 ­ 17.0 ­ 17.0 Sarajevo Privatization Venture Collective Investment Vehicles FY02, 03 11.5 ­ 13.4 + 13.4 70 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Bosnia and Herzegovina (continued) Sarajevska Pivara, d.d. Food & Beverages FY98 4.1 ­ 0.4 ­ 0.4 Sour Energoinvest Industrial & Consumer Products FY85 11.7 ­ 9.5 ­ 9.5 Tvornica Kartona I Ambalaze Cazin Pulp & Paper FY77 8.0 7.1 4.1 ­ 4.1 Wood Agency Credit Line Inga o.d.p. Industrial & Consumer Products FY98 ­ ­ 2.0 ­ 2.0 Wood Agency Credit Line Vrbas m.d.p. Industrial & Consumer Products FY98 ­ ­ 2.0 ­ 2.0 95.2 12.3 107.5 Bulgaria Bulbank AD Finance & Insurance FY01 17.3 ­ ­ 17.5 17.5 Bulgarian-American Credit Bank A.D. Finance & Insurance FY99, 03 10.0 ­ 5.2 ­ 5.2 Devnya Cement A.D. Nonmetallic Mineral Product FY99 30.0 ­ 23.2 ­ 23.2 Manufacturing Doverie Brico Wholesale & Retail Trade FY01 4.5 ­ 5.1 ­ 5.1 Drujba A.D. Nonmetallic Mineral Product FY04 24.3 ­ 24.3 ­ 24.3 Manufacturing Epiq Electronic Assembly EOOD Industrial & Consumer Products FY01 5.5 ­ 6.5 ­ 6.5 Euromerchant Balkan Fund SICAV Collective Investment Vehicles FY95 5.0 ­ ­ 4.0 4.0 Florina Bulgaria S.A. Food & Beverages FY01 3.8 ­ 5.0 ­ 5.0 Kronospan Bulgaria EOOD Industrial & Consumer Products FY00, 01 19.7 12.3 20.3 ­ 20.3 Paper Factory Stambolijski Pulp & Paper FY02 25.5 ­ 22.0 2.0 24.0 Petreco S.A.R.L. Oil, Gas, & Mining FY03 17.0 ­ 17.0 ­ 17.0 ProCredit Bank AD Finance & Insurance FY01, 03, 04 15.7 ­ 12.2 3.5 15.7 Sofia Hilton Accommodation & Tourism Services FY98 13.0 9.5 11.7 ­ 11.7 Sofia Med Primary Metals FY01 11.6 ­ 16.4 ­ 16.4 Stomana Industry A.D. Primary Metals FY04 21.2 ­ 22.5 ­ 22.5 Trakya Glass Bulgaria EAD Nonmetallic Mineral Product FY04 42.7 ­ 35.2 7.5 42.7 Manufacturing Unionbank AD Finance & Insurance FY03 5.0 ­ 5.0 ­ 5.0 231.7 34.5 266.3 Croatia Belisce d.d. Pulp & Paper FY73, 81, 98, 03 60.7 64.1 19.9 6.0 25.9 Brodogradiliste Industrial & Consumer Products FY00 12.1 9.0 6.0 0.5 6.5 The CC Partnership L.P. Collective Investment Vehicles FY99 5.0 ­ ­ 4.9 4.9 Croatia Banka d.d. Finance & Insurance FY02 8.4 ­ 10.9 ­ 10.9 Erste & Steiermarkische Bank d.d. Finance & Insurance FY00, 03 36.4 ­ 33.2 ­ 33.2 Pliva d.d. Chemicals FY01 35.0 12.5 10.0 ­ 10.0 80.1 11.4 91.5 Cyprus Kronospan Holding Limited Industrial & Consumer Products FY04 51.1 ­ 51.1 ­ 51.1 51.1 ­ 51.1 Czech Republic CDV-1 Holding Company, L.P. Finance & Insurance FY01, 03 17.3 ­ ­ 1.6 1.6 The Czech and Slovak Collective Investment Vehicles FY95 2.5 ­ ­ 2.5 2.5 Private Equity Fund, L.P. Hayes Wheels Autokola Nová Hut, a.s. Industrial & Consumer Products FY94 16.1 21.5 3.1 ­ 3.1 Ispat Nova Hut a.s. Primary Metals FY97, 98 85.8 161.8 75.9 ­ 75.9 79.1 4.1 83.1 Estonia Horizon Tselluloosi Ja Paberi Aktsiaselts Pulp & Paper FY98, 00 13.1 ­ 7.7 1.5 9.2 Kreenholmi Valduse AS Textiles, Apparel, & Leather FY01, 04 8.4 11.9 11.4 ­ 11.4 19.1 1.5 20.6 IFC 2004 ANNUAL REPORT 71 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Georgia Bank of Georgia Finance & Insurance FY00, 03 7.2 ­ 6.4 ­ 6.4 JSC Saatksio Szagadoeba MINA Nonmetallic Mineral Product FY99 8.8 ­ 6.3 2.5 8.8 Manufacturing ProCredit Bank Finance & Insurance FY99, 00, 01, 02, 04 12.1 ­ 10.0 2.2 12.2 TBC Bank Finance & Insurance FY98, 00, 02, 04 6.9 ­ 2.7 0.9 3.6 TbilComBank Finance & Insurance FY99 1.0 ­ + ­ + 25.4 5.5 31.0 Hungary Axon Vagyonkezelö Organizációs Finance & Insurance FY99 1.0 ­ ­ 0.9 0.9 és Befektétesi First Hungary Fund Limited Collective Investment Vehicles FY90 7.5 ­ ­ 2.2 2.2 Honeywell ESCO Hungary Utilities FY00 0.4 ­ ­ 0.4 0.4 ­ 3.6 3.6 Kazakhstan ABN­AMRO Bank Kazakhstan Finance & Insurance FY94, 96, 98, 03 15.3 1.0 10.0 4.6 14.6 CASPI Limited Accommodation & Tourism Services FY01 2.5 ­ 2.3 ­ 2.3 Closed Joint Stock Company Nonmetallic Mineral Product FY99 0.7 ­ 0.7 ­ 0.7 "Kazakhstan Construction Company" Manufacturing First International Oil Corporation Oil, Gas, & Mining FY01 + ­ ­ 0.0 0.0 Ispat Karmet SME Resource TOO Collective Investment Vehicles FY02 3.4 ­ 3.3 0.1 3.4 Joint Stock Company Ispat Karmet Primary Metals FY98, 99 30.7 ­ 11.4 ­ 11.4 Kazgermunai Oil, Gas, & Mining FY98 41.0 ­ 18.0 0.7 18.7 Kazkommertsbank Finance & Insurance FY97, 00, 03 12.5 ­ ­ 1.0 1.0 LP-Gaz, LLP Utilities FY00 1.0 ­ 0.4 ­ 0.4 Lukoil Overseas Karachaganak B.V. Oil, Gas, & Mining FY03 75.0 75.0 75.0 ­ 75.0 Nelson Resources Limited Oil, Gas, & Mining FY97, 98, 03, 04 7.3 ­ ­ 4.4 4.4 OJSC NefteBank Finance & Insurance FY01 2.5 ­ 2.5 ­ 2.5 Rambutya Limited Liability Partnership Wholesale & Retail Trade FY00, 02 12.9 ­ 8.3 ­ 8.3 Sazankurak Joint Stock Company Oil, Gas, & Mining FY01 20.0 ­ 15.8 ­ 15.8 TuranAlem Bank Finance & Insurance FY00, 03 15.0 ­ 3.4 4.9 8.3 151.0 15.8 166.8 Kyrgyz Republic Akun Ltd. Food & Beverages FY02 2.4 ­ 2.4 ­ 2.4 Demirbank Kyrgyz International Bank Finance & Insurance FY97, 03 0.6 ­ ­ 0.6 0.6 FINCA Microfinance Resource Finance & Insurance FY02 1.0 ­ ­ 1.0 1.0 Joint Stock Commercial Bank Kyrgyzstan Finance & Insurance FY04 1.5 ­ 1.5 ­ 1.5 Joint­Stock Company Investment Finance & Insurance FY04 1.5 ­ 1.5 ­ 1.5 Export-Import Bank (Inexim) Kyrgyz-Chinese Joint Venture Pulp & Paper FY00 0.3 ­ 0.2 ­ 0.2 Altyn-Ajydar Kyrgyz Investment & Commercial Bank Finance & Insurance FY01 1.4 ­ ­ 1.4 1.4 5.6 3.0 8.6 Latvia Linstow Varner SIA Wholesale & Retail Trade FY02 25.0 35.0 26.7 ­ 26.7 26.7 ­ 26.7 Lithuania AB Drobe Wool Textiles, Apparel, & Leather FY00 6.6 ­ 5.4 0.5 5.9 Viesbutis Lietuva Accommodation & Tourism Services FY02 9.3 9.3 12.2 ­ 12.2 17.6 0.5 18.1 72 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Macedonia, Former Yugoslav Republic of Alkaloid A.D. Skopje Chemicals FY00 9.1 ­ 6.4 ­ 6.4 Komercijalna Banka A.D. Skopje Finance & Insurance FY01 3.1 ­ 3.3 ­ 3.3 Macedonian Telecommunications (MT) Information FY98 25.0 25.0 ­ 11.3 11.3 Makedonijaturist A.D. Accommodation & Tourism Services FY99 4.4 ­ 0.9 ­ 0.9 Masinomont DOO Skopje Industrial & Consumer Products FY98 0.8 ­ 0.4 ­ 0.4 Nikol-Fert Primary Metals FY98 3.8 ­ 0.5 ­ 0.5 ProCredit Bank Finance & Insurance FY03 1.0 ­ ­ 1.1 1.1 Small Enterprise Assistance Fund-- Collective Investment Vehicles FY00 2.5 ­ ­ 1.3 1.3 Macedonia Fund L.L.C. Stopanska Banka a.d. Skopje Finance & Insurance FY98, 00, 01, 03 12.4 ­ ­ 10.5 10.5 Teteks A.D. Tetovo Textiles, Apparel, & Leather FY98, 02 6.8 ­ 4.9 ­ 4.9 16.5 24.3 40.8 Moldova FinComBank S.A. Finance & Insurance FY03, 04 3.0 ­ 3.0 ­ 3.0 INCON JSC, Cupchin JSC, Food & Beverages FY97 7.4 ­ 5.2 + 5.2 Ungheni JSC, and Floresti JSC Micro Enterprise Credit S.A. Finance & Insurance FY00 1.0 ­ 0.9 0.1 1.0 Moldinconbank S.A. Finance & Insurance FY01, 04 7.0 ­ 6.1 ­ 6.1 RED Chisinau, RED Centru & RED Sud Utilities FY02 25.0 ­ 25.0 ­ 25.0 Victoriabank Finance & Insurance FY02, 04 9.0 ­ 7.9 ­ 7.9 Voxtel S.A. Information FY99, 00, 01 15.3 21.8 10.3 1.6 11.9 58.3 1.7 60.0 Poland Baltic Malt Sp. z o.o. Food & Beverages FY97 8.6 ­ 0.5 2.0 2.5 Central Poland Fund, L.L.C. Collective Investment Vehicles FY98 1.6 ­ ­ 1.6 1.6 Global Hotels Development Accommodation & Tourism Services FY99 10.4 ­ 9.2 3.2 12.4 Group Poland S.A. Honeywell ESCO Polska Utilities FY92 0.2 ­ ­ 0.2 0.2 Intercell S.A. Pulp & Paper FY95, 97, 98, 01, 04 64.0 ­ 48.7 13.6 62.2 Peters Fleischindustrie und Food & Beverages FY94 6.5 ­ 0.4 ­ 0.4 Handel Aktiengesellschaft Pilkington Polska Sp. z o.o. Nonmetallic Mineral Product FY93 42.4 22.1 3.4 ­ 3.4 Manufacturing The Poland Investment Fund L.P. Collective Investment Vehicles FY95 2.5 ­ ­ 1.5 1.5 Schwarz Group Wholesale & Retail Trade FY04 48.6 ­ 48.7 ­ 48.7 110.8 22.1 132.9 Romania Ambro S.A. Pulp & Paper FY00 6.2 ­ 2.9 ­ 2.9 Banc Post S.A. Finance & Insurance FY99, 02 20.0 ­ 10.0 ­ 10.0 Banca Comerciala Romana S. A. Finance & Insurance FY03, 04 186.0 ­ 75.0 111.0 186.0 Banca Romaneasca Finance & Insurance FY01 5.9 ­ 3.9 ­ 3.9 Banca Transilvania Finance & Insurance FY04 24.3 ­ 24.3 ­ 24.3 Danube Fund Limited Collective Investment Vehicles FY97 2.0 ­ ­ 1.2 1.2 Dunapack Rambox Prodimpex S.R.L. Pulp & Paper FY99 3.9 ­ 0.4 2.0 2.4 ICME Primary Metals FY02 8.7 ­ 11.2 ­ 11.2 Krupp Bilstein Compa S.A. Industrial & Consumer Products FY98 2.8 2.8 0.3 ­ 0.3 Krupp Compa Arcuri S.A. Industrial & Consumer Products FY99 7.4 3.2 2.2 ­ 2.2 Microfinance Bank (MIRO) S.A. Finance & Insurance FY02, 03, 04 12.6 ­ 10.0 2.6 12.6 Ro-Fin Mortgage Loan Company Finance & Insurance FY04 5.0 ­ 5.0 ­ 5.0 Romanian-American Enterprise Fund Finance & Insurance FY04 3.0 ­ 3.0 ­ 3.0 Romlease Finance & Insurance FY95, 98, 01 9.8 ­ 2.7 ­ 2.7 S.C. Arctic S.A. Industrial & Consumer Products FY03 11.0 ­ 12.2 ­ 12.2 163.1 116.8 279.9 IFC 2004 ANNUAL REPORT 73 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Russian Federation A.O. Mosenergo Utilities FY98 20.0 ­ 12.4 ­ 12.4 Agro-Industrial Finance Company Finance & Insurance FY03 5.5 7.5 5.0 0.5 5.5 Aminex Plc Oil, Gas, & Mining FY97, 99 12.6 ­ ­ 5.5 5.5 Baltiskii Leasing ZAO Finance & Insurance FY02 2.0 ­ 0.9 ­ 0.9 Banque Société Générale Vostok Finance & Insurance FY04 75.0 ­ 75.0 ­ 75.0 Baring Vostok Private Equity Fund, L.P. 2 Collective Investment Vehicles FY01 15.0 ­ ­ 14.9 14.9 BCEN Eurobank Finance & Insurance FY03 100.0 ­ 100.0 ­ 100.0 BSGV Leasing Finance & Insurance FY04 19.5 ­ 19.5 ­ 19.5 Commercial Bank DeltaCredit Finance & Insurance FY02, 03 50.0 ­ 48.8 ­ 48.8 Delta Lease Far East Finance & Insurance FY04 4.0 ­ 4.0 ­ 4.0 Egar Technology Professional, Scientific, & Technical FY02 1.5 ­ ­ 1.5 1.5 Services Framlington Russian Investment Fund Collective Investment Vehicles FY94 8.0 ­ ­ 3.7 3.7 IBS Group Holdings Limited Information FY03 12.0 ­ 12.0 ­ 12.0 IKEA MOS (Retail and Property) OOO Wholesale & Retail Trade FY00 15.0 ­ 15.0 ­ 15.0 Independent Network Television Information FY04 10.5 ­ 7.0 3.5 10.5 Holdings, Ltd. Industry & Construction Bank Finance & Insurance FY02 10.0 ­ 10.0 ­ 10.0 JSC Lebedyansky Food & Beverages FY04 35.0 ­ 35.0 ­ 35.0 JSC SFAT; JSC RUSWORLD Transportation & Warehousing FY04 15.0 ­ 15.0 ­ 15.0 JSC Volga-Dnepr Airlines Transportation & Warehousing FY02 16.9 13.0 16.9 ­ 16.9 Moscow Narodny Bank, Ltd. Finance & Insurance FY03 100.0 ­ 100.0 ­ 100.0 NBD Bank Finance & Insurance FY02, 03 9.5 ­ 9.1 ­ 9.1 New Medical Center Health Care FY01 2.1 ­ 2.2 ­ 2.2 OAO Borsky Stekolny Zavod Nonmetallic Mineral Product FY98, 03 42.2 ­ 26.1 15.0 41.1 Manufacturing OAO Siberia Airlines Transportation & Warehousing FY04 25.0 ­ 25.0 ­ 25.0 Omsukchansk Mining Oil, Gas, & Mining FY01 10.0 ­ 4.6 ­ 4.6 and Geological Company OOO Kronostar Industrial & Consumer Products FY04 49.3 49.3 50.0 ­ 50.0 OOO Ruscam Nonmetallic Mineral Product FY02, 03, 04 40.5 ­ 39.5 ­ 39.5 Manufacturing OOO Stora Enso Packaging BB Pulp & Paper FY00, 02 14.5 ­ 8.7 ­ 8.7 OOO Swedwood Tichvin Industrial & Consumer Products FY02 5.6 ­ 7.2 ­ 7.2 Open Joint Stock Company Finance & Insurance FY02 2.0 ­ 0.8 ­ 0.8 Commercial Bank "Center-invest" Pilkington Float Glass Russia Nonmetallic Mineral Product FY04 53.7 ­ 51.7 ­ 51.7 Manufacturing Probusiness Bank Finance & Insurance FY02 5.0 ­ 5.0 ­ 5.0 Ramenka Ltd. Wholesale & Retail Trade FY99, 01, 03 100.5 30.0 76.5 ­ 76.5 Ru-Net Holdings Professional, Scientific, & Technical FY03 6.0 ­ 3.0 3.0 6.0 Services Russian Standard Bank Finance & Insurance FY02, 04 50.0 ­ 39.9 10.0 49.9 The Russian Technology Fund, L.P. Collective Investment Vehicles FY96 1.0 ­ ­ 0.9 0.9 Sector Investment Holding Collective Investment Vehicles FY96 ­ ­ ­ 1.1 1.1 Company Limited Severstaltrans; Balttranservis; Transportation & Warehousing FY04 40.0 ­ 40.0 ­ 40.0 Sevtekhnotrans Small Business Credit Bank (KMB Bank) Finance & Insurance FY02 7.0 ­ 7.0 ­ 7.0 Sonic Duo Information FY02 30.0 10.0 30.0 ­ 30.0 Stavropolsky Broiler Agriculture & Forestry FY03 15.0 ­ 15.0 ­ 15.0 Sveza Holding Industrial & Consumer Products FY04 40.5 ­ 40.5 ­ 40.5 UralTransBank Finance & Insurance FY03 10.0 ­ 10.0 ­ 10.0 ZAO Deutsche Leasing Vostok Finance & Insurance FY00 0.6 ­ ­ 0.6 0.6 ZAO Europlan Finance & Insurance FY02 10.0 ­ 8.6 ­ 8.6 ZAO Kulon Development, Transportation & Warehousing FY04 7.5 ­ 7.5 ­ 7.5 ZAO Kulon Estate ZAO Raiffeisenbank Austria Finance & Insurance FY03 80.0 ­ 78.9 ­ 78.9 1,063.2 60.2 1,123.4 74 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Serbia and Montenegro Institut Za Fizikalnu Medicinu I Health Care FY82, 88 22.0 ­ 10.5 ­ 10.5 Rehabilitaciju ("Dr. Simo Milosevic") Igalo Investiciona Banka Titograd- Accommodation & Tourism Services FY80 21.0 ­ 2.0 ­ 2.0 Udruzena Banka Jugobanka-Udruzena Banka Beograd Finance & Insurance FY86 23.0 9.8 + ­ + Loan to Eight Banks Finance & Insurance FY80 26.0 5.7 + ­ + for Small-Scale Enterprises ProCredit Bank a.d Finance & Insurance FY02, 03 14.0 ­ 12.8 2.0 14.8 ProCredit Bank Kosovo Finance & Insurance FY02 1.1 ­ ­ 1.1 1.1 Radoje Dakic Industrial & Consumer Products FY80 18.7 ­ 1.2 ­ 1.2 Raiffeisenbank Yugoslavija a.d. Finance & Insurance FY02 2.3 ­ ­ 2.4 2.4 Tigar Rubber Products Company A.D. Plastics & Rubber FY02 17.6 ­ 19.5 4.1 23.6 Vojvodjanska Banka--Udruzena Banka Finance & Insurance FY87, 89 54.6 29.5 49.8 ­ 49.8 95.7 9.6 105.3 Slovakia Raiffeisen International Finance & Insurance FY04 120.8 ­ 60.0 60.8 120.8 Bank--Holding AG Raiffeisen Zentralbank Osterreich--RZB Finance & Insurance FY04 120.8 ­ 60.0 60.8 120.8 (Originally GZB) 120.0 121.6 241.6 Slovenia Poteza Adriatic Fund B.V. Collective Investment Vehicles FY04 13.7 ­ ­ 13.7 13.7 The Slovenian Development Collective Investment Vehicles FY95 4.6 ­ ­ 0.0 0.0 Capital Fund Limited ­ 13.7 13.7 Tajikistan Giavoni Textiles, Apparel, & Leather FY03 3.0 ­ ­ 3.0 3.0 Holland-Tajik Joint Venture M & P Wholesale & Retail Trade FY00 0.4 ­ 0.2 ­ 0.2 Open Joint Stock Company Utilities FY03 8.0 ­ 4.5 3.5 8.0 Pamir Energy Company SugdAgroServ Agriculture & Forestry FY02, 04 0.8 ­ 0.8 ­ 0.8 Telecom Technology Ltd. Information FY02 0.4 ­ 0.3 ­ 0.3 5.7 6.5 12.2 Turkey Akbank Finance & Insurance FY03 55.0 100.0 55.0 ­ 55.0 Alternatif Bank, A.S. Finance & Insurance FY99, 00 12.0 15.0 0.8 ­ 0.8 Arçelik, A.S. Industrial & Consumer Products FY96, 01, 03 94.6 89.7 74.1 ­ 74.1 Arçelik-LG Klima Sanayi ve Ticaret A.S. Industrial & Consumer Products FY00 15.3 10.2 11.7 ­ 11.7 Assan Demir ve Sac Sanayii A.S. Primary Metals FY94, 97, 02 55.3 10.0 25.5 ­ 25.5 Atilim University Education Services FY02 6.5 ­ 6.5 ­ 6.5 Banvit Bandirma Vitaminli Yem Sanayi A.S. Agriculture & Forestry FY01 25.0 ­ 11.7 5.0 16.7 Bayindirbank A.S. Finance & Insurance FY94, 97, 00 30.0 60.0 4.5 ­ 4.5 Beko Elektronik A.S. Industrial & Consumer Products FY03 25.0 25.1 30.8 ­ 30.8 Borçelik Çelik Sanayii ve Ticaret A.S. Primary Metals FY95, 96, 97 47.1 ­ 10.0 9.7 19.7 Borusan Holding A.S. Primary Metals FY04 40.0 ­ 40.0 ­ 40.0 CBS Holding A.S. Chemicals FY94 15.5 ­ 3.6 ­ 3.6 Eczacibasi Karo Seramik Construction & Real Estate FY02 9.9 ­ 12.9 ­ 12.9 Ege Liman Isletmeleri A.S. Transportation & Warehousing FY04 10.0 8.0 10.0 ­ 10.0 Entek Elecktrik Uretimi A.S. Utilities FY98 25.0 26.5 19.8 ­ 19.8 Finansbank, A.S. Finance & Insurance FY92, 00 20.0 55.6 4.4 ­ 4.4 Garanti Finansal Kiralama A.S. Finance & Insurance FY95, 98, 00, 04 29.3 43.4 10.0 ­ 10.0 Gümüssuyu Hali ve Yer Kaplamalari Textiles, Apparel, & Leather FY99 7.0 ­ 7.4 ­ 7.4 Sanayi ve Ticaret A.S. IFC 2004 ANNUAL REPORT 75 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Turkey (continued) Gunkol/TEBA Industrial & Consumer Products FY02 10.2 ­ 6.4 6.2 12.6 Indorama Iplik Sanayi ve Ticaret A.S. Textiles, Apparel, & Leather FY99 10.7 ­ 5.6 ­ 5.6 Ipek Kagit Sanayii ve Ticaret A.S. Pulp & Paper FY98, 00, 02 45.0 33.0 35.0 ­ 35.0 Istanbul Bilgi University Education Services FY01 12.0 ­ 10.0 ­ 10.0 Kepez Elektrik, T.A.S. Utilities FY91 20.2 ­ 3.2 ­ 3.2 Kiris Otelcilik ve Turizm A.S. Accommodation & Tourism Services FY89, 90 23.8 ­ 26.8 ­ 26.8 Koc Finansal Kiralama A.S. Finance & Insurance FY97, 04 45.0 ­ 30.0 ­ 30.0 Kula Mensucat Fabrikasi A.S. Textiles, Apparel, & Leather FY91 20.1 ­ 5.1 ­ 5.1 Medya Holding A.S. Information FY93, 96 28.6 ­ 5.0 ­ 5.0 MESA Health and Education Health Care FY04 11.0 ­ 11.0 ­ 11.0 Institutions--Management, Inc. & MESA Housing Industries, Inc. Meteksan Sistem ve Bilgisayar Professional, Scientific, & Technical FY04 8.5 ­ 8.5 ­ 8.5 Teknolojileri A.S. Services Milli Reasurans T.A.S. Finance & Insurance FY02 50.0 ­ 50.0 ­ 50.0 Modern Karton Sanayii ve Ticaret A.S. Pulp & Paper FY98, 02 30.0 10.0 19.1 ­ 19.1 Nasco Nasreddin Holding A.S. Textiles, Apparel, & Leather FY92 17.5 5.0 10.2 ­ 10.2 Opet Petrolcülük A.S. Chemicals FY04 25.0 40.0 25.0 ­ 25.0 Oyak Bank A.S. Finance & Insurance FY98, 04 65.0 25.0 50.0 ­ 50.0 Pasabahce-Schott Cam Nonmetallic Mineral Product FY99, 02 23.6 16.1 5.6 ­ 5.6 Sanayi ve Ticaret A.S. Manufacturing Pinar Entegre Et ve Yem Sanayii A.S. Food & Beverages FY84, 94, 98 21.9 ­ 4.7 ­ 4.7 Pinar Süt Mamülleri Sanayii A.S. Food & Beverages FY94, 00 22.5 ­ 13.8 ­ 13.8 Sakosa Sabanci-Kosa Endnstriyel Iplik Textiles, Apparel, & Leather FY99 24.8 24.3 19.3 ­ 19.3 Ve Kord Bezi Sanayi ve Ticaret A.S. Silkar Turizm Yatirim ve Isletmeleri A.S. Accommodation & Tourism Services FY86, 90 18.6 9.5 2.4 ­ 2.4 Söktas Pamuk ve Tarim Ürunlerini Textiles, Apparel, & Leather FY98, 02 17.0 ­ 7.7 ­ 7.7 Degerlendirme Ticaret ve Sanayi A.S. TEB Finansal Kiralama A.S. Finance & Insurance FY99 5.0 ­ 1.1 ­ 1.1 Trakya Cam Sanayii A.S. Nonmetallic Mineral Product FY79, 83, 84, 89, 67.7 31.0 ­ 1.8 1.8 Manufacturing 91, 96, 99 Türk Ekonomi Bankasi A.S. Finance & Insurance FY95, 99, 03 62.5 32.5 33.9 ­ 33.9 Turkish Private Equity Fund I L.P. Collective Investment Vehicles FY02 10.0 ­ ­ 10.0 10.0 Türkiye Sise ve Cam Fabrikalari, A.S. Nonmetallic Mineral Product FY93, 97, 02, 03 137.0 88.5 88.8 ­ 88.8 Manufacturing Unye Cimento Sanayi ve Ticaret A.S. Nonmetallic Mineral Product FY00 22.5 ­ 10.3 ­ 10.3 Manufacturing Uzel Makina Sanayii A.S. Industrial & Consumer Products FY99 11.4 8.5 9.5 ­ 9.5 Viking Kagit ve Seluloz, A.S. Pulp & Paper FY70, 71, 82, 83, 98 15.3 ­ 8.4 ­ 8.4 Yalova Elyaf Acrylic Fibre Textiles, Apparel, & Leather FY96 15.0 8.0 2.5 ­ 2.5 Yeditepe Beynelmilel Otelcilik Turizm ve Accommodation & Tourism Services FY90, 94, 02 31.8 27.5 9.8 ­ 9.8 Ticaret A.S. (Conrad Istanbul Hotel) 857.7 32.7 890.4 Ukraine CJSC Mironovsky Khleboprodukt Agriculture & Forestry FY04 30.0 ­ 30.0 ­ 30.0 First Lease Finance & Insurance FY04 2.0 ­ 2.0 ­ 2.0 First Ukrainian International Bank Finance & Insurance FY98 5.0 ­ ­ 5.0 5.0 Joint Stock Commercial Bank Finance & Insurance FY98, 03, 04 2.8 ­ ­ 2.8 2.8 HVB Bank Ukraine Microfinance Bank of Ukraine Finance & Insurance FY01, 04 14.7 ­ 12.0 2.7 14.7 Nova Liniya Wholesale & Retail Trade FY04 5.0 ­ 5.0 ­ 5.0 Sandora Limited Liability Company Food & Beverages FY04 10.0 ­ 10.0 ­ 10.0 Ukraine Venture Capital Fund II Collective Investment Vehicles FY94, 97 3.2 ­ ­ 1.7 1.7 59.0 12.2 71.2 76 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity EUROPE AND CENTRAL ASIA Uzbekistan ABN AMRO Bank Uzbekistan Finance & Insurance FY96 1.0 ­ ­ 1.0 1.0 Asaka Bank Finance & Insurance FY00, 03 15.0 ­ 11.0 ­ 11.0 Fayz Holding Joint Stock Company Industrial & Consumer Products FY98 2.4 ­ 0.4 0.5 0.9 of the Open Type Hamkorbank, Joint Stock Finance & Insurance FY01 1.0 ­ 1.0 ­ 1.0 Commercial Bank National Bank of Uzbekistan Finance & Insurance FY00 15.0 ­ 13.6 ­ 13.6 Osiyo Granite Ltd. Nonmetallic Mineral Product FY01 1.7 ­ 1.5 ­ 1.5 Manufacturing Parvina Bank, Private Closed Finance & Insurance FY01 1.0 ­ 1.0 ­ 1.0 Joint Stock Commercial Bank Uzbek Leasing International A.O. Finance & Insurance FY96, 01, 03 3.4 ­ 2.4 0.9 3.3 Uzdutch Cheese Ltd. Food & Beverages FY00 0.6 ­ 0.5 ­ 0.5 31.4 2.4 33.8 Regional Investment ABC Medicover Holdings B.V. Health Care FY99 7.0 ­ 2.0 ­ 2.0 Advent Central and Eastern Europe II L.P. Collective Investment Vehicles FY98 15.0 ­ ­ 14.2 14.2 Advent Central and Eastern Europe III L.P. Collective Investment Vehicles FY04 15.1 ­ ­ 15.2 15.2 Advent Central Europe Management L.P. Collective Investment Vehicles FY95 0.0 ­ ­ 0.0 + Advent Private Equity Fund-- Collective Investment Vehicles FY95 10.0 ­ ­ 4.8 4.8 Central Europe L.P. AIG Emerging Europe Infrastructure Collective Investment Vehicles FY00 30.0 ­ ­ 30.0 30.0 Fund L.P. and Emerging Europe Infrastructure Fund C.V. Alliance ScanEast Fund, L.P. Collective Investment Vehicles FY94 4.9 ­ ­ 1.0 1.0 Baltic American Enterprise Fund Finance & Insurance FY03 50.0 ­ 50.0 ­ 50.0 Bancroft II, L.P. Collective Investment Vehicles FY03 19.8 ­ ­ 24.2 24.2 Black Sea Fund L.P. Collective Investment Vehicles FY99, 02 14.5 ­ ­ 12.7 12.7 Central and Eastern Europe Collective Investment Vehicles FY01 3.3 ­ ­ 3.2 3.2 Growth Fund, L.L.C. Central Asia Small Enterprise Fund LLC Collective Investment Vehicles FY03 2.5 ­ ­ 2.5 2.5 Central Europe Telecom Investments Ltd. Collective Investment Vehicles FY94 9.7 ­ ­ 0.0 0.0 Euromedic Diagnostics B.V. & Health Care FY02, 04 25.6 ­ 28.7 ­ 28.7 International Hemodialysis Centers B.V. European Renaissance Capital, L.P. Collective Investment Vehicles FY94 5.0 ­ ­ 3.6 3.6 Hanseatic Capital, LLC Finance & Insurance FY03 7.4 ­ 9.1 ­ 9.1 MFI Facility--Central Asia Finance & Insurance FY03 45.0 ­ 45.0 ­ 45.0 New Europe-East Investment Fund Collective Investment Vehicles FY93 10.0 ­ ­ + + NIS Restructuring Facility, L. P. Collective Investment Vehicles FY00 10.0 ­ ­ 8.7 8.7 The Romania & Moldova Direct Fund, L.P. Collective Investment Vehicles FY99 4.0 ­ ­ 1.1 1.1 SEAF Trans-Balkan Fund LLC Collective Investment Vehicles FY01 4.8 ­ ­ 4.6 4.6 134.8 125.8 260.6 Total equity and loans 3,608.1 675.8 4,283.9 Total structured finance (including guarantees) and risk management products 114.0 Total IFC portfolio for Europe and Central Asia 4,397.9 IFC 2004 ANNUAL REPORT 77 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Argentina Aceitera General Deheza S.A. Food & Beverages FY95, 02, 04 105.0 30.0 80.0 ­ 80.0 Acindar Industria Argentina Primary Metals FY60, 95, 97, 99 119.4 65.7 42.8 ­ 42.8 de Aceros, S.A. Aguas Argentinas S.A. Utilities FY95, 96 85.0 307.5 46.6 7.0 53.6 Aguas Provinciales de Santa Fe S.A. Utilities FY01 20.0 20.5 20.0 ­ 20.0 Alpargatas, S.A.I.C. Textiles, Apparel, & Leather FY77, 84, 86, 88, 94, 76.3 77.0 ­ + + 97 American Plast, S.A. Plastics & Rubber FY99 10.0 ­ 3.0 ­ 3.0 Asociación Unión Tamberos Food & Beverages FY99 6.0 ­ 3.6 ­ 3.6 Cooperativa Limitada (AUTCL) Banco de Crédito y Securitización, S.A. Finance & Insurance FY00 59.1 ­ 8.3 12.5 20.8 Banco de Galicia y Buenos Aires, S.A. Finance & Insurance FY97, 99, 00, 04 87.5 245.0 68.8 ­ 68.8 Banco del Suquia Finance & Insurance FY98, 99, 03 45.0 25.0 10.5 ­ 10.5 Banco General de Negocios S.A. Finance & Insurance FY94, 99 48.0 ­ 33.0 ­ 33.0 Banco Hipotecario S.A. Finance & Insurance FY00 25.0 102.5 25.0 ­ 25.0 Banco Macro Bansud S.A. Finance & Insurance FY97 4.9 ­ 0.8 ­ 0.8 Bunge Argentina S.A. Food & Beverages FY97 20.0 ­ 10.4 ­ 10.4 CCBA S.A. (Brahma Argentina) Food & Beverages FY96 18.5 33.0 9.2 ­ 9.2 Cefas S.A. Oil, Gas, & Mining FY00 11.0 ­ 7.3 ­ 7.3 Cerámica Zanón S.A.C.I.y M. Nonmetallic Mineral Product FY96 20.0 ­ 6.0 ­ 6.0 Manufacturing Chevron San Jorge SRL Oil, Gas, & Mining FY92, 93, 97, 99 73.4 35.0 ­ 58.4* 58.4 (Neuquen Basin, Huantraico) Compañía Elaboradora de Productos Food & Beverages FY95 15.0 6.0 6.0 ­ 6.0 Alimenticios S.A. (CEPA) Compañías Asociadas Petroleras S.A. Oil, Gas, & Mining FY97 17.0 33.0 8.3 ­ 8.3 Concesiones y Construcciones Transportation & Warehousing FY00 26.0 ­ 6.0 20.0 26.0 de Infraestructura S.A. Correo Argentino S.A. Transportation & Warehousing FY99 75.0 ­ 57.4 6.8 64.2 Empresa Distribuidora y Utilities FY94 45.0 128.0 17.8 ­ 17.8 Comercializadora del Norte S.A. (EDENOR) Faplac S.A. Industrial & Consumer Products FY00 15.0 ­ 14.2 ­ 14.2 FRIAR S.A. Food & Beverages FY98 12.5 7.0 5.7 ­ 5.7 Frigorifico Rioplatense S.A.I.C.I.F. Food & Beverages FY92 13.0 4.0 3.0 + 3.0 FV S.A. Industrial & Consumer Products FY99 16.0 ­ 9.3 ­ 9.3 Grunbaum, Rico y Daucourt S.A.I.C. Textiles, Apparel, & Leather FY96 10.0 5.0 4.5 ­ 4.5 Grupo Financiero Galicia S.A. Finance & Insurance FY99 ­ ­ ­ 3.1 3.1 Hospital Privado Centro Health Care FY99 9.6 ­ 8.5 ­ 8.5 Médico de Córdoba S.A. Juan Minetti, S.A. Nonmetallic Mineral Product FY78, 81, 86, 87, 101.8 197.5 14.3 ­ 14.3 Manufacturing 93, 94, 96, 99 Jumbo Argentina S.A. Wholesale & Retail Trade FY04 40.0 ­ ­ 40.0 40.0 Maltería Pampa, S.A. Food & Beverages FY93, 96 19.0 12.0 2.0 ­ 2.0 Milkaut S.A. Food & Beverages FY97, 98 20.0 5.0 16.0 5.0 21.1 Molinos Rio de la Plata S.A. Food & Beverages FY93, 94, 03 32.3 30.0 30.0 5.5 35.5 Nahuelsat S.A. Information FY95 35.0 ­ 5.7 ­ 5.7 Nuevo Central Argentino S.A. Transportation & Warehousing FY93 13.0 15.0 ­ 3.0 3.0 Patagonia Fund, L.P. Collective Investment Vehicles FY98 20.0 ­ ­ 15.0 15.0 Patagonia Mint S.A. Food & Beverages FY98 6.0 ­ 2.8 ­ 2.8 S.A. San Miguel A.G.I.C.I. y F. Agriculture & Forestry FY99 12.2 ­ 7.0 ­ 7.0 SanCor Cooperativas Unidas Ltda. Food & Beverages FY95 40.0 30.0 28.8 ­ 28.8 Sideco Americana S.A. Transportation & Warehousing FY95 ­ ­ ­ 15.0 15.0 Socma Americana S.A. Transportation & Warehousing FY95 40.0 60.0 6.3 ­ 6.3 T6 Industrial S.A. Food & Beverages FY98 15.0 30.0 10.6 ­ 10.6 Terminal 6, S.A. Transportation & Warehousing FY87, 90, 91, 96, 98 33.0 19.5 6.2 ­ 6.2 Terminales Portuarias Argentinas S.A. Transportation & Warehousing FY96 12.0 ­ 2.5 ­ 2.5 The Tower Fund, L.P. Collective Investment Vehicles FY95 25.0 ­ ­ 19.8 19.8 78 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Argentina (continued) The Tower Investment Collective Investment Vehicles FY95 0.2 ­ ­ 0.0 0.0 Management Company Transportadora de Gas del Norte S.A. Transportation & Warehousing FY97 45.0 210.0 38.2 ­ 38.2 Universidad del Salvador Education Services FY01 10.0 ­ 10.0 ­ 10.0 Vicentin S.A.I.C. Food & Beverages FY97, 03 55.0 40.0 43.8 ­ 43.8 Yacylec S.A. Utilities FY94 20.0 45.0 1.5 5.0 6.5 741.3 216.1 957.5 Belize Asociación Unión Tamberos Agriculture & Forestry FY98 5.5 ­ 4.3 ­ 4.3 Cooperativa Limitada (AUTCL) 4.3 ­ 4.3 Bolivia Aguas del Illimani S.A. Utilities FY00 7.1 ­ 4.9 1.0 5.9 Banco Bisa S.A. Finance & Insurance FY76, 88, 91, 92, 95, 28.7 ­ 1.0 3.2 4.2 98 Banco Mercantil S.A. Finance & Insurance FY96 10.0 ­ 2.9 ­ 2.9 Banco Sol Finance & Insurance FY04 6.0 ­ 6.0 ­ 6.0 Caja Los Andes S.A. Finance & Insurance FY99, 01, 03 10.0 ­ 8.2 ­ 8.2 CB Transporte e Infraestructura Transportation & Warehousing FY99 2.0 ­ 0.8 ­ 0.8 S.A. (CBTI) Central Aguirre Portuaria, S.A. Transportation & Warehousing FY92, 02 4.7 ­ 2.1 0.4 2.4 Compañía Boliviana de Gas Natural Chemicals FY93 2.3 ­ 0.3 ­ 0.3 Comprimido S.A. (GENEX) Compañía Minera del Sur, S.A. Oil, Gas, & Mining FY90, 94, 96, 00 40.6 5.0 3.8 ­ 3.8 Electropaz S.A. Utilities FY00 25.0 ­ 19.9 ­ 19.9 F.I.E. Fondo Financiero Privado Finance & Insurance FY03 2.5 ­ 2.5 ­ 2.5 Minera S.A. Oil, Gas, & Mining FY87, 90 ­ ­ ­ 3.4 3.4 PRODEM Finance & Insurance FY04 3.0 ­ 3.0 ­ 3.0 Telefónica Celular de Bolivia S.A Information FY97, 01 26.7 23.3 10.6 ­ 10.6 Transportadora de Electricidad S.A. Utilities FY03 30.0 ­ 30.0 ­ 30.0 Transportes Ferroviarios S.A. Transportation & Warehousing FY99 ­ ­ ­ 4.4 4.4 Trenes Continentales S.A. Transportation & Warehousing FY99 ­ ­ ­ 2.9 2.9 95.8 15.3 111.1 Brazil Algar Telecom S.A. Information FY97 43.2 ­ 13.5 18.2 31.7 Amaggi Exportaçao Food & Beverages FY03 30.0 ­ 30.0 ­ 30.0 e Importaçao Limitada Andrade Gutierrez Concessoes S.A. Utilities FY02 30.0 ­ 15.0 15.0 30.0 Andrade Gutierrez S.A. Collective Investment Vehicles FY03 40.0 20.0 40.0 ­ 40.0 Apolo Produtos de Aço SA Primary Metals FY02 8.0 ­ 8.0 ­ 8.0 Bahía Sul S.A. Pulp & Paper FY90, 91, 93 61.0 60.0 ­ 2.6 2.6 Banco Bradesco, S.A. Finance & Insurance FY97, 03 26.8 85.2 1.7 ­ 1.7 Banco Itaú­BBA S.A. Finance & Insurance FY01, 02, 03 130.0 60.0 118.6 ­ 118.6 Bulk Services Corporation Transportation & Warehousing FY98 14.0 7.5 5.8 ­ 5.8 Bunge Alimentos S.A. Food & Beverages FY93, 96 90.0 130.0 ­ 3.4 3.4 Chapecó Companhia Industrial Food & Beverages FY94, 96 43.9 5.3 11.8 ­ 11.8 de Alimentos (CHAPECO) Comgas Utilities FY04 45.0 ­ 45.0 ­ 45.0 Companhia de Tecidos Norte Textiles, Apparel, & Leather FY93, 98, 00 25.5 20.0 6.6 7.7 14.3 de Minas (Coteminas) Companhia Petroquímica do Sul S.A. Chemicals FY98 40.0 180.0 12.5 ­ 12.5 Concessionária do Sistema Transportation & Warehousing FY00 29.2 25.9 24.4 ­ 24.4 Anhanguera Bandeirantes S.A. Construtora Norberto Odebrecht Construction & Real Estate FY02, 04 105.0 165.0 71.7 ­ 71.7 IFC 2004 ANNUAL REPORT 79 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Brazil (continued) CPFL Energía S.A. Utilities FY03 40.0 ­ 40.0 ­ 40.0 CRP­Caderi Capital de Risco S.A. Collective Investment Vehicles FY95 0.8 ­ ­ 0.3 0.3 Dendo do para S.A. Agricultura, Food & Beverages FY80, 94 5.3 ­ ­ 1.1 1.1 Indùstria e Comércio de Oleaginosas Dixie Toga S.A. Plastics & Rubber FY98 15.0 ­ ­ 15.0 15.0 Duratex S.A. Industrial & Consumer Products FY88, 97 29.4 78.0 7.3 ­ 7.3 El Paso Rio Claro Limitada Utilities FY03 75.0 50.0 62.0 ­ 62.0 Empesca S.A. Construçoes Navais, Food & Beverages FY98 15.0 ­ 15.0 ­ 15.0 Pesca e Exportaçao Empresa de Desenvolvimento de Oil, Gas, & Mining FY73, 78 9.3 54.0 ­ 4.3 4.3 Recursos Minerais (CODEMIN) S.A. Escol@24Horas Education Services FY01, 02 3.5 ­ ­ 3.5 3.5 Fertilizantes Fosfatado S.A. Chemicals FY99 20.0 45.0 6.1 ­ 6.1 Fras-le, S.A. Industrial & Consumer Products FY99 20.0 ­ 6.7 10.0 16.7 Gavea Hotelaria e Turismo S.A. Accommodation & Tourism Services FY94 16.8 ­ 7.4 ­ 7.4 Grupo Peixoto de Castro Participaçôes S.A. Chemicals FY02 9.0 ­ 9.0 ­ 9.0 Icatu Equity Partners L.P. Collective Investment Vehicles FY98 14.0 ­ ­ 14.0 14.0 Industrias Arteb S.A. Industrial & Consumer Products FY98 27.0 20.0 20.0 7.0 27.0 Innova SA Chemicals FY00 25.0 60.0 13.8 5.0 18.8 Ipiranga Petroquímica S.A. Chemicals FY80, 87, 98 61.3 178.0 23.6 6.3 29.9 Itaberaba Participaçôes S.A. Health Care FY00 5.3 ­ ­ 5.3 5.3 Joaquim Oliveira S.A. Participaçôes Agriculture & Forestry FY01 15.0 ­ 14.6 ­ 14.6 Laboratorio Fleury Health Care FY00, 04 35.0 ­ 33.1 ­ 33.1 Lojas Americanas S.A. Wholesale & Retail Trade FY96 33.0 20.0 4.0 ­ 4.0 Macedo Alimentos Nordeste S.A. Food & Beverages FY93 ­ ­ 2.5 ­ 2.5 Maximilano Gaidzinski S.A.­Indústria Nonmetallic Mineral Product FY00 45.0 ­ 36.5 ­ 36.5 de Azulejos Eliane Manufacturing Microinvest S.A. Sociedade de Finance & Insurance FY03 1.3 ­ ­ 1.3 1.3 Credito Ao Microempreendedor Mineraçôes Brasileiras Reunidas S.A. Oil, Gas, & Mining FY88, 93, 01 75.0 27.0 25.0 ­ 25.0 Net Serviços de Comunicaçao S. A. Information FY95, 02 4.7 ­ ­ 36.4 36.4 New GP Capital Partner B L.P. Collective Investment Vehicles FY94 ­ ­ ­ 9.7 9.7 Pará Pigmentos S.A. Oil, Gas, & Mining FY95 39.0 33.5 10.8 9.0 19.8 Perdigao S.A. Comércio e Indústria Food & Beverages FY88, 96 57.9 20.0 6.6 ­ 6.6 Petroquimica Triunfo S.A. Chemicals FY81, 87 13.7 14.9 ­ + + Portobello S.A. Nonmetallic Mineral Product FY95, 00, 02 39.1 ­ 15.2 6.1 21.4 Manufacturing Puras do Brasil S.A. Accommodation & Tourism Services FY00 5.0 ­ 3.0 ­ 3.0 Queiroz Galvao Perfuraçôes S.A. Oil, Gas, & Mining FY03, 04 40.0 ­ 40.0 ­ 40.0 Randon S.A. Implementos e Participaçoes Industrial & Consumer Products FY99 ­ ­ 7.2 ­ 7.2 Sadia Concórdia S.A. Food & Beverages FY94, 95, 97 80.0 222.0 11.7 1.5 13.2 Indústria e Comércio Salutia Health Care FY02, 04 2.7 ­ ­ 2.7 2.7 Samarco Mineraçâo S.A. Oil, Gas, & Mining FY97 18.0 16.0 7.2 ­ 7.2 Saraiva S.A. Livreiros Editores Wholesale & Retail Trade FY98 18.0 ­ 4.6 3.0 7.6 Satipel Industrial S.A. Industrial & Consumer Products FY03 25.0 ­ 25.0 ­ 25.0 Sepetiba Terminal de Contêineres S.A. Transportation & Warehousing FY02 32.0 8.0 31.9 ­ 31.9 Sudamerica en Fiesta, S.A. de C.V. Accommodation & Tourism Services FY00 15.0 ­ ­ 15.0 15.0 Synteko Produtos Químicos S.A. Chemicals FY02 18.0 ­ 18.0 ­ 18.0 São Paulo Alpargatas S.A. Textiles, Apparel, & Leather FY87, 97, 03 90.0 ­ 43.3 ­ 43.3 Tecon Rio Grande S.A. Transportation & Warehousing FY99, 04 20.2 24.1 18.7 ­ 18.7 Tecon Salvador S.A. Transportation & Warehousing FY01, 03 5.0 5.0 3.4 1.6 5.0 Tigre SA Tubos e Conexoes Plastics & Rubber FY97 30.0 23.5 3.8 ­ 3.8 Unibanco­Uniao de Bancos Brasileiros S.A. Finance & Insurance FY88, 96, 02, 03, 04 144.8 250.0 62.5 ­ 62.5 80 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN UP Offshore Apoio Maritimo Ltda.­ Transportation & Warehousing FY03 21.6 30.0 11.6 10.0 21.6 UP Offshore (Bahamas) Ltd. Usina Hidrelétrica Guilman-Amorim S.A. Utilities FY98 30.0 91.0 22.7 ­ 22.7 Vulcabras do Nordeste S.A. Textiles, Apparel, & Leather FY99 20.0 ­ 8.3 ­ 8.3 Wiest S.A. Industrial & Consumer Products FY99 8.0 ­ 8.0 ­ 8.0 1,094.4 215.1 1,309.5 Chile Aguas Nuevo Sur Maule S.A. Utilities FY04 33.0 33.0 33.0 ­ 33.0 Certifica.com Information FY01 1.5 ­ ­ 1.5 1.5 Ferrocarril del Pacífico S.A. Transportation & Warehousing FY97 20.5 6.0 ­ 5.6 5.6 Hidroeléctrica Aconcagua S.A. Utilities FY92, 93 14.5 6.0 ­ 6.5 6.5 HQI Transelec Chile S.A. Utilities FY03 60.0 ­ 60.0 ­ 60.0 Lan Chile S.A. Transportation & Warehousing FY03 30.0 ­ 30.0 ­ 30.0 Minera Escondida Limitada Oil, Gas, & Mining FY89, 93, 99 87.6 ­ 15.8 7.5 23.3 Moneda Asset Management S.A. Collective Investment Vehicles FY94, 96, 97 0.5 ­ ­ 0.5 0.5 Pionero Fondo de Inversión Mobiliaria Collective Investment Vehicles FY94 10.0 ­ ­ 3.8 3.8 Proa Fondo de Inversión Collective Investment Vehicles FY94, 96 8.3 ­ ­ 6.2 6.2 de Desarrollo de Empresas San Antonio Terminal Internacional S.A. Transportation & Warehousing FY01 38.7 65.0 35.0 3.7 38.7 San Vicente Terminal Internacional S.A. Transportation & Warehousing FY04 15.0 ­ 15.0 ­ 15.0 Sociedad Nacional de Procesamiento Information FY04 10.0 ­ ­ 10.0 10.0 de Datos S.A. 188.8 45.1 234.0 Colombia Banco Caja Social Finance & Insurance FY02 7.0 ­ ­ 7.0 7.0 Bavaria S.A. Food & Beverages FY02 100.0 145.0 100.0 ­ 100.0 Cales y Cementos de Toluviejo, S.A. Nonmetallic Mineral Product FY01 3.3 7.1 3.3 ­ 3.3 Manufacturing Cartones America, S.A. Industrial & Consumer Products FY04 22.0 ­ 22.0 ­ 22.0 Cementos del Caribe, S.A. Nonmetallic Mineral Product FY75, 01 17.6 13.0 3.4 7.5 10.9 Manufacturing Colombian Home Mortgage Finance & Insurance FY02, 04 12.9 ­ 4.3 8.8 13.1 Corp. (CHMC) Compañía Suramericana de Finance & Insurance FY99 5.1 ­ ­ 5.1 5.1 Arrendamiento Operativo S.A. Corporación Financiera del Valle Finance & Insurance FY69, 85, 93, 95 51.1 60.0 ­ 7.4 7.4 Corporación Financiera Nacional Finance & Insurance FY96, 00 88.9 ­ 25.0 25.0 50.0 y Suramericana, S.A. Inversura S. A. Finance & Insurance FY02 15.0 ­ ­ 15.0 15.0 Omimex de Colombia, Ltd. Oil, Gas, & Mining FY03 35.0 ­ 35.0 ­ 35.0 Productora de Derivados de la Sal, Chemicals FY87 7.2 ­ ­ 0.6 0.6 S.A. (PRODESAL) Promigas S.A. E.S.P. Transportation & Warehousing FY77, 89, 93, 94, 97 38.3 69.5 2.5 1.1 3.6 Promotora de Inversiones Finance & Insurance FY94, 95 6.4 ­ ­ 0.2 0.2 de Santander, S.A Protección S. A. Finance & Insurance FY02 10.0 ­ ­ 10.0 10.0 Suramericana de Inversiones S.A. Finance & Insurance FY02 75.0 ­ 75.4 ­ 75.4 270.9 87.8 358.7 IFC 2004 ANNUAL REPORT 81 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Costa Rica Alterra Partners Costa Rica S.A. Transportation & Warehousing FY01 35.0 85.0 34.5 ­ 34.5 Banco Cuscatlán de Costa Rica Finance & Insurance FY03 5.0 ­ 5.0 ­ 5.0 Banco Interfín S.A. Finance & Insurance FY93, 01, 04 40.0 ­ 31.3 ­ 31.3 Consorcio Hospitalario Internacional, S.A. Health Care FY99 1.2 ­ ­ 1.2 1.2 Corporación Supermercados Unidos S.A. Wholesale & Retail Trade FY99 40.0 ­ 22.6 10.0 32.6 Hidroelèctrica Aguas Zarcas, S.A. Utilities FY94 4.0 6.1 1.0 ­ 1.0 Productos Gutis S.A. Health Care FY03 7.0 ­ 7.0 ­ 7.0 101.3 11.2 112.5 Dominican Republic Banco BHD, S.A. Finance & Insurance FY03 20.0 ­ 20.0 ­ 20.0 Caucedo Investments Inc. Transportation & Warehousing FY02 30.0 ­ 30.0 ­ 30.0 Domicem S.A. Nonmetallic Mineral Product FY04 24.0 24.0 24.0 ­ 24.0 Manufacturing Grupo M Textiles, Apparel, & Leather FY04 20.0 ­ 20.0 ­ 20.0 Inversora Internacional Hotelera, S.A. Accommodation & Tourism Services FY99 14.0 21.7 10.9 ­ 10.9 Orange Dominicana S.A. Information FY02 50.0 50.0 49.5 ­ 49.5 Pasteurizadora Rica C. por A. Food & Beverages FY00 15.0 ­ 12.0 ­ 12.0 Red Sanitaria Hospiten Health Care FY00, 03 14.0 10.0 13.7 ­ 13.7 Smith-Enron Cogeneration Utilities FY95, 96 32.3 50.0 12.5 ­ 12.5 Limited Partnership 192.5 ­ 192.5 Ecuador Agrocapital, S.A. Agriculture & Forestry FY97 3.5 ­ 3.5 ­ 3.5 Compañía Financiera Ecuatoriana Finance & Insurance FY69, 73, 77, 81, 82, 3.0 ­ ­ + + de Desarollo, S.A. 88 Concesionaria DHM, S.A. Transportation & Warehousing FY99 12.8 15.0 11.5 1.0 12.5 Ecuacobre-FV S.A. Nonmetallic Mineral Product FY00 9.0 ­ 7.1 ­ 7.1 Manufacturing Favorita Fruit Company, Ltd. Agriculture & Forestry FY99, 03 30.0 ­ 20.4 5.0 25.4 La Universal S.A. Agriculture & Forestry FY99 13.2 ­ 8.2 + 8.2 Sociedad Financiera Ecuatorial S.A Finance & Insurance FY04 2.0 ­ 2.0 ­ 2.0 52.7 6.0 58.7 El Salvador AFP Crecer, S.A. Finance & Insurance FY99 ­ ­ ­ 1.2 1.2 Banco Agricola S.A. Finance & Insurance FY04 50.0 ­ 50.0 ­ 50.0 Banco Cuscatlán, S.A. Finance & Insurance FY99, 03 40.0 ­ 27.9 ­ 27.9 Baterías de El Salvador, S.A. Industrial & Consumer Products FY99 2.0 ­ 1.1 ­ 1.1 Cemento de El Salvador, S.A. (CESSA) Nonmetallic Mineral Product FY97, 00 19.6 20.6 ­ 2.2 2.2 Manufacturing Compañía de Alumbrado Eléctrico Utilities FY02 45.0 75.0 42.6 ­ 42.6 de San Salvador, S.A. de C.V. Confia AFP S.A. Collective Investment Vehicles FY04 7.5 ­ ­ 7.5 7.5 Financiera Calpia S.A. Finance & Insurance FY03, 04 12.0 ­ 10.0 2.0 12.0 Implementos Agrícolas Industrial & Consumer Products FY98, 99 2.2 ­ ­ 0.2 0.2 Centroamericanos, S.A. Metrocentro, S.A. de C.V. Wholesale & Retail Trade FY04 25.0 ­ 25.0 ­ 25.0 156.6 13.1 169.7 Grenada Bel Air Plantation Limited Accommodation & Tourism Services FY02 2.0 ­ 2.0 ­ 2.0 2.0 ­ 2.0 82 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Guatemala Banco Cuscatlán de Guatemala Finance & Insurance FY03 10.0 ­ 10.0 ­ 10.0 Banco de Occidente. S.A. Finance & Insurance FY03 10.0 ­ 10.0 ­ 10.0 Fabrigas, S.A. Utilities FY95 7.0 ­ 1.0 ­ 1.0 Frutera del Pacífico, S.A. Agriculture & Forestry FY00 7.0 ­ 4.2 ­ 4.2 Generadora de Occidente Limitada Utilities FY03 15.0 12.0 15.0 ­ 15.0 Interforest S.A. Industrial & Consumer Products FY03 6.0 ­ 6.0 ­ 6.0 Montana Exploradora de Guatemala S.A. Oil, Gas, & Mining FY04 45.0 ­ 45.0 ­ 45.0 Operadora de Tiendas, S.A. Wholesale & Retail Trade FY99 20.0 ­ 13.7 ­ 13.7 (La Fragua, S.A.) Orzunil I de Electricidad, Limitada Utilities FY98, 00 14.3 15.0 9.9 1.2 11.1 Pantaleón, S.A. Food & Beverages FY97 20.0 ­ 3.8 ­ 3.8 118.5 1.2 119.7 Guyana Guyana Americas Merchant Bank Finance & Insurance FY00 1.0 ­ ­ 1.0 1.0 Heritage Limited (Cara Lodge) Accommodation & Tourism Services FY00 0.7 ­ 0.7 ­ 0.7 0.7 1.0 1.7 Haiti Micro Crédit National S.A. Finance & Insurance FY00 0.4 ­ ­ 0.4 0.4 ­ 0.4 0.4 Honduras Electricidad de Cortés, S. de R.L. de C.V. Utilities FY95, 98 16.6 36.3 ­ 2.6 2.6 Grupo Granjas Marinas, S.A. de C.V. Agriculture & Forestry FY87, 99 6.6 ­ 4.0 ­ 4.0 Multiplaza de Tegucigalpa Accommodation & Tourism Services FY99 10.0 ­ 6.4 ­ 6.4 10.4 2.6 13.0 Jamaica Jamaica Energy Partners Utilities FY97 23.9 48.0 9.5 ­ 9.5 Jamaica Public Service Company Utilities FY03 45.0 ­ 45.0 ­ 45.0 MBJ Airports Limited Transportation & Warehousing FY02 20.0 25.0 20.0 ­ 20.0 Mossel (Jamaica) Limited Information FY01, 02 50.0 5.8 37.7 8.0 45.7 112.2 8.0 120.2 Mexico AES Mérida III S. de R.L. de C.V. Utilities FY98 30.0 74.0 27.1 ­ 27.1 Agropecuaria Sanfandila S.A. de C.V. Agriculture & Forestry FY99 8.7 4.3 5.6 ­ 5.6 American British Cowdray Health Care FY01 30.0 14.0 30.0 ­ 30.0 Medical Center I.A.P. Apasco S.A. de C.V. Nonmetallic Mineral Product FY88, 91, 92, 93, 96 176.4 119.9 7.2 ­ 7.2 Manufacturing Banco BBVA­Bancomer Finance & Insurance FY97 ­ ­ 27.5 ­ 27.5 Baring Mexico Private Equity Fund L.P. Collective Investment Vehicles FY96, 99 11.8 ­ ­ 8.4 8.4 Central Anáhuac S.A. de C.V Utilities FY00 50.0 59.5 46.6 ­ 46.6 Central Lomas de Real S.A. de C.V. Utilities FY04 70.0 106.2 70.0 ­ 70.0 Central Saltillo S.A. de C.V. Utilities FY00 35.0 43.0 33.0 ­ 33.0 Central Valle Hermoso S.A. de C.V. Utilities FY04 70.0 107.1 70.0 ­ 70.0 Combustibles Ecológicos Chemicals FY02 6.5 ­ 4.8 1.5 6.3 Mexicanos, S.A. de C.V. Consorcio International Health Care FY99 4.8 ­ ­ 4.8 4.8 Hospital, S.A. de C.V. Copamex Productos al Pulp & Paper FY04 50.0 46.0 50.0 ­ 50.0 Consumidor, S.A. de C.V. Coppel S.A. de C.V. Wholesale & Retail Trade FY02 30.0 ­ 30.0 ­ 30.0 Corporativo Copamex, S.A. de C.V. Pulp & Paper FY03 25.0 ­ 25.0 ­ 25.0 IFC 2004 ANNUAL REPORT 83 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Mexico (continued) Desarrollo Terrestre Mexicano, Transportation & Warehousing FY04 37.0 ­ 37.0 ­ 37.0 S.A. de C.V. Financiera Compartamos, S.A. Finance & Insurance FY01 1.7 ­ 1.0 0.7 1.7 de C.V., S.F.O.L. Fomento Económico Mexicano S.A. Food & Beverages FY89 107.6 ­ ­ 2.7 2.7 de C.V. Fondo Chiapas, S.A. de C.V. Sociedad Collective Investment Vehicles FY98 5.0 ­ ­ 3.3 3.3 de Inversión de Capitales Forja de Monterrey, S.A. de C.V. Industrial & Consumer Products FY99 16.0 13.0 7.4 3.0 10.4 GW Servicios, S.A. de C.V. Transportation & Warehousing FY01 12.4 10.0 8.3 1.9 10.2 Girsa, S.A. de C.V. Chemicals FY97, 00 85.0 175.0 38.2 ­ 38.2 Grupo Aceros Corsa, S.A. de C.V. Primary Metals FY00 16.0 ­ 7.4 3.0 10.4 Grupo Bimbo, S.A. de C.V. Food & Beverages FY92, 96 65.0 175.0 10.8 ­ 10.8 Grupo Calidra, S.A. de C.V. Oil, Gas, & Mining FY98, 04 38.0 10.0 27.3 6.0 33.3 Grupo Financiero Banorte, S. A. de C.V. Finance & Insurance FY03 50.0 ­ 50.0 ­ 50.0 Grupo Industrial Ayvi S.A. de C.V. Agriculture & Forestry FY99 10.0 ­ 5.7 ­ 5.7 Grupo Mexmal Industrial & Consumer Products FY03 10.0 ­ 10.0 ­ 10.0 Grupo Minsa S.A. de C.V. Food & Beverages FY97 30.0 30.0 12.6 ­ 12.6 Grupo Posadas, S.A. de C.V. Accommodation & Tourism Services FY92, 93, 95, 96, 00 83.7 68.5 41.4 5.0 46.4 Hipotecaria Nacional, S.A. de C.V. Finance & Insurance FY04 99.7 ­ 100.7 ­ 100.7 Hipotecaria Su Casita, S.A. Finance & Insurance FY01, 04 28.9 ­ 17.4 10.6 28.0 de C.V.­SOFOL Industrias Innopack S.A. de C.V. Plastics & Rubber FY01 15.0 ­ ­ 15.0 15.0 Interoyal Hotelera, S.L. Accommodation & Tourism Services FY03 ­ ­ ­ 0.0 0.0 Medicus, S.A. de C.V. Health Care FY99 7.0 ­ 6.8 ­ 6.8 Mexplus Puertos S.A. de C.V. Transportation & Warehousing FY93, 95, 96, 99 4.5 ­ ­ 4.5 4.5 Occidental Hotels Mexico, S.A. de C.V. Accommodation & Tourism Services FY03 40.0 40.0 30.0 ­ 30.0 Occihold International, S.L. Accommodation & Tourism Services FY03 ­ ­ ­ 10.0 10.0 Pan American Silver Corporation Oil, Gas, & Mining FY00, 02 10.9 ­ ­ 6.4 6.4 Polomex S.A. de C.V. Industrial & Consumer Products FY03 8.0 ­ 6.0 ­ 6.0 Promotora de Centros Educativos S.A. Education Services FY01 6.5 ­ 6.2 ­ 6.2 de C.V. Propalma Fondo Chiapas Equity Food & Beverages FY98 ­ ­ ­ 1.0 1.0 Agency Line Subinvestment Puertas Finas de Madera Industrial & Consumer Products FY02 13.0 ­ 12.2 ­ 12.2 Montealbán, S.A. de C.V. Qualitá, Inc. Information FY02 6.0 ­ 3.5 2.5 6.0 SSA Mexico Holdings, S.A. de C.V. Transportation & Warehousing FY04 45.0 ­ 45.0 ­ 45.0 Tenedora Nemak, S.A. de C.V. Industrial & Consumer Products FY96, 99, 00, 01 33.0 35.0 9.0 ­ 9.0 Terminal Maritima de Altamira, Transportation & Warehousing FY97 5.1 10.4 4.5 ­ 4.5 S.A. de C.V. Turborreactores S.A. de C.V. Industrial & Consumer Products FY00 14.0 4.0 10.0 ­ 10.0 ZN Mexico Capital Growth Fund Ltd. Collective Investment Vehicles FY99 15.3 ­ ­ 15.3 15.3 ZN Mexico Capital Management, LLC Collective Investment Vehicles FY99 10.0 ­ ­ 10.0 10.0 935.3 115.6 1,050.9 Nicaragua Casa Mantica S.A. and Inmuebles Wholesale & Retail Trade FY99 2.5 ­ 1.6 ­ 1.6 Diano Marina, S.A. Confía Finance & Insurance FY04 5.0 ­ 5.0 ­ 5.0 Distribuidora Cesar Guerrero S.A. Wholesale & Retail Trade FY99 1.0 ­ 0.4 ­ 0.4 Financiera Arrendadora Finance & Insurance FY00 2.0 ­ 0.6 ­ 0.6 Centroamericana, S.A. Frutales del San Juan, S.A. Agriculture & Forestry FY99 2.0 ­ 0.4 0.4 0.7 8.0 0.4 8.4 84 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Panama Aguas de Panamá S.A. Utilities FY03 6.0 10.0 5.8 ­ 5.8 Banco Continental de Panamá, S.A. Finance & Insurance FY93, 04 41.7 ­ 40.0 ­ 40.0 Banco Del Istmo, S.A. (Banistmo) Finance & Insurance FY00 20.0 38.0 14.1 ­ 14.1 Banco General S.A. Finance & Insurance FY98, 00 40.0 ­ 34.6 ­ 34.6 Corporación UBC Internacional, S.A. Finance & Insurance FY03, 04 10.3 ­ ­ 10.3 10.3 ICA Panama, S.A. Transportation & Warehousing FY00 35.0 35.0 33.8 ­ 33.8 La Hipotecaria Finance & Insurance FY04 15.0 ­ 15.0 ­ 15.0 Manzanillo International Terminal-- Transportation & Warehousing FY95, 00 40.0 35.0 26.5 ­ 26.5 Panama, S.A. Panama Canal Railway Company Transportation & Warehousing FY00 20.0 30.0 14.2 5.0 19.2 Suleasing Internacional S.A. Finance & Insurance FY00 5.0 ­ 4.9 5.0 9.9 UP Offshore (Panama) S.A. Transportation & Warehousing FY03 13.1 5.3 13.1 ­ 13.1 201.9 20.3 222.2 Peru Agraria El Escoria S.A. Food & Beverages FY00 7.0 ­ 7.0 ­ 7.0 Agro Industrial Paramonga S.A. Food & Beverages FY98 14.2 14.8 13.0 ­ 13.0 Alicorp S.A. Food & Beverages FY00 40.0 20.0 34.7 ­ 34.7 Banco Internacional del Peru Finance & Insurance FY98, 04 60.0 100.0 40.0 ­ 40.0 Edpyme Edyficar S.A. Finance & Insurance FY04 3.0 ­ 3.0 ­ 3.0 Empresa Agroindustrial Laredo S.A.A. Food & Beverages FY00 15.0 ­ 12.1 ­ 12.1 Ferrocarril Transandino S.A. Transportation & Warehousing FY02 9.0 ­ 9.0 ­ 9.0 Global Microcredit Facility Finance & Insurance FY04 4.0 ­ 4.0 ­ 4.0 Gloria S.A. Food & Beverages FY04 25.0 ­ 25.0 ­ 25.0 Inka Terra, Peru S.A.C. Accommodation & Tourism Services FY01 5.0 ­ 5.0 ­ 5.0 Interconexión Eléctrica ISA Perú S.A. Utilities FY02, 03 18.0 8.0 16.9 ­ 16.9 Interseguro Compania de Finance & Insurance FY02, 03 4.6 ­ ­ 4.6 4.6 Seguros de Vida S.A. Latino Leasing, S.A. Finance & Insurance FY98 12.5 ­ 5.7 + 5.7 MIBANCO, Banco de la Finance & Insurance FY02 3.0 ­ 1.7 ­ 1.7 Microempresa, S.A. Minera Quellaveco S.A. Oil, Gas, & Mining FY93, 96, 00, 01 12.9 ­ ­ 12.9 12.9 Minera Yanacocha S.A. Oil, Gas, & Mining FY94, 95, 00 42.7 59.0 20.0 0.3 20.3 Norvial S.A. Transportation & Warehousing FY03 18.0 ­ 18.0 ­ 18.0 Peru Orient Express Hotel Accommodation & Tourism Services FY01 10.0 ­ 10.0 ­ 10.0 Peru Privatization Fund L.P. Collective Investment Vehicles FY95 13.9 ­ ­ 8.3 8.3 The Peru Privatization Fund Management Collective Investment Vehicles FY95 + ­ ­ + + Services Company Limited Ransa Comercial S.A. Transportation & Warehousing FY00 10.0 ­ 6.9 ­ 6.9 S.A. Minera Regina Oil, Gas, & Mining FY85 3.0 ­ 0.1 ­ 0.1 Sociedad Agrícola Drokasa S.A. Agriculture & Forestry FY00 6.0 ­ 4.2 ­ 4.2 Tecnofil S.A. Industrial & Consumer Products FY02 7.4 ­ 5.0 2.0 7.0 TIM Peru Information FY03 70.0 ­ 70.0 ­ 70.0 Universidad Peruana de Ciencias Education Services FY01 7.0 ­ 6.0 ­ 6.0 Aplicadas, S.A. 317.2 28.1 345.4 Trinidad and Tobago Caribe Hospitality Trinidad & Tobago Accommodation & Tourism Services FY04 3.8 ­ 3.8 ­ 3.8 Republic Bank Limited Finance & Insurance FY02, 03 70.0 ­ 69.1 ­ 69.1 Royal Merchant Bank Finance & Insurance FY02 20.0 ­ 18.8 ­ 18.8 and Finance Company Unicell Paper Mills Caribbean Pulp & Paper FY02 9.0 ­ 9.0 ­ 9.0 Ltd. (UPMCL) U.W.I., St. Augustine-- Education Services FY04 5.0 ­ 5.0 ­ 5.0 Institute of Business 105.7 ­ 105.7 IFC 2004 ANNUAL REPORT 85 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Uruguay Azucitrus S.A. Food & Beverages FY85, 93 11.9 ­ ­ 1.9 1.9 Banco Montevideo S.A. Finance & Insurance FY02 18.0 ­ 9.0 9.0 18.0 Consorcio Aeropuertos Transportation & Warehousing FY96 8.0 10.0 2.7 ­ 2.7 Internacionales S.A. Cooperativa Nacional Food & Beverages FY03 30.0 ­ 30.0 ­ 30.0 de Productores de Leche Granja Avicola Moro Food & Beverages FY92 3.8 ­ ­ + + Surinvest International Limited Finance & Insurance FY80, 87, 89, 97, 02 19.0 10.0 4.9 1.8 6.7 Universidad de Montevideo Education Services FY01 5.0 ­ 4.8 ­ 4.8 51.4 12.7 64.1 Venezuela, República Bolivariana de C.A. La Electricidad de Caracas Utilities FY00, 01 70.0 35.0 45.9 ­ 45.9 Compañía Anónima Nacional Information FY96 43.4 131.6 25.0 ­ 25.0 Teléfonos de Venezuela Complejo Siderurgico de Guayana, C.A. Primary Metals FY97, 98 45.0 121.0 16.3 10.0 26.3 Corporación de Cemento Andino, C.A. Nonmetallic Mineral Product FY01 7.6 21.3 6.8 ­ 6.8 Manufacturing Forestal Trillium Industrial & Consumer Products FY00 22.8 10.0 16.8 6.0 22.8 Global Materials Services Venezuela, Transportation & Warehousing FY02 3.2 ­ 1.8 ­ 1.8 C.A./ACBL Riverside Terminals C.A. Grupo Zuliano, S.A. C.A. Chemicals FY92, 94 14.1 ­ ­ 0.0 0.0 Intersea Farms de Venezuela, C.A. Agriculture & Forestry FY02 8.0 ­ 5.0 3.0 8.0 Metanol de Oriente, Metor, S.A. Chemicals FY93 37.9 93.3 ­ 6.8 6.8 Minera Loma de Niquel, C.A. Oil, Gas, & Mining FY98, 00 75.2 50.0 2.9 4.4 7.3 Petrobras Energía Venezuela Oil, Gas, & Mining FY04 105.0 ­ 100.8 ­ 100.8 Productora de Alcoholes Chemicals FY91 39.4 2.0 6.0 ­ 6.0 Hidratados, C.A. Propileno de Falcón, C.A. (Profalca) Chemicals FY00 24.0 23.0 17.3 ­ 17.3 Telecomunicaciones Movilnet, C.A. Information FY98 35.0 60.0 15.3 ­ 15.3 259.8 30.2 290.0 Regional Investment Advent Latin American Private Equity Collective Investment Vehicles FY02 15.0 ­ ­ 15.0 15.0 Fund II B Limited Partnership Aureos Central America Fund, L.L.C. Collective Investment Vehicles FY03 8.3 ­ ­ 8.3 8.3 Convergence Communications, Inc. Information FY00, 01, 02 7.1 ­ ­ 7.1 7.1 Darby-BBVA Latin America Collective Investment Vehicles FY03 10.0 ­ ­ 10.0 10.0 Private Equity Fund, L.P. Digicel Eastern Caribbean Limited Information FY01, 04 14.3 ­ 13.4 0.9 14.3 Eastern Caribbean Home Finance & Insurance FY97 0.4 ­ ­ 0.4 0.4 Mortgage Bank (ECHMB) HSBC Private Equity Latin Collective Investment Vehicles FY01 ­ ­ ­ 0.3 0.3 America (Cayman) L.P. HSBC Tower II Equity Collective Investment Vehicles FY01 20.0 ­ ­ 16.7 16.7 Partners (Cayman) L.P. Latin American Agribusiness Finance & Insurance FY02 20.0 ­ 20.0 ­ 20.0 Development Corporation S.A. The Latin America Enterprise Fund, L.P. Collective Investment Vehicles FY95 20.0 ­ ­ 11.6 11.6 The Latin America Enterprise Fund II, L.P. Collective Investment Vehicles FY98 13.1 ­ ­ 13.1 13.1 Latin Power I L.D.C. Collective Investment Vehicles FY93 25.0 ­ ­ 19.0 19.0 Latin Power II L.D.C. Collective Investment Vehicles FY98 7.0 ­ ­ 3.4 3.4 Marcopolo S.A. Industrial & Consumer Products FY03 30.0 ­ 30.0 ­ 30.0 Medical Systems Finance Finance & Insurance FY98, 01, 02 17.0 27.6 7.8 ­ 7.8 Holding Limited PriceSmart, Inc. Wholesale & Retail Trade FY01, 02 42.0 ­ 27.9 10.0 37.9 Profund Internacional, S.A. Collective Investment Vehicles FY96 3.0 ­ ­ 1.7 1.7 86 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity LATIN AMERICA AND THE CARIBBEAN Regional Investment (continued) Scotiabank Multicountry Loan Facility Finance & Insurance FY01 25.0 25.0 25.0 ­ 25.0 TCW/Latin America Partners LLC Collective Investment Vehicles FY00 20.0 ­ ­ 20.0 20.0 Terra Capital Investors Ltd. Collective Investment Vehicles FY99 5.0 ­ ­ 2.2 2.2 Trans Union Central America Finance & Insurance FY03 0.4 ­ ­ 0.4 0.4 UABL Limited Transportation & Warehousing FY03 25.0 10.0 20.0 ­ 20.0 UPR Holdings Transportation & Warehousing FY03 ­ ­ ­ 5.0 5.0 144.0 145.2 289.3 Total equity and loans 5,165.9 975.8 6,141.7 Total structured finance (including guarantees) and risk management products 112.5 Total IFC portfolio for Latin America and the Caribbean 6,254.2 IFC 2004 ANNUAL REPORT 87 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity MIDDLE EAST AND NORTH AFRICA Afghanistan First Microfinance Bank of Afghanistan Finance & Insurance FY04 1.0 ­ ­ 1.0 1.0 Tourism Promotion Services Accommodation & Tourism Services FY04 7.0 ­ 7.0 ­ 7.0 (Afghanistan) LTD. 7.0 1.0 8.0 Algeria Algerian Cement Company Nonmetallic Mineral Product FY03, 04 45.0 ­ 45.0 ­ 45.0 Manufacturing Algiers Investment Partnership S.P.A. Finance & Insurance FY00 0.2 ­ ­ 0.2 0.2 Arab Banking Corporation Algeria Finance & Insurance FY98, 02 1.9 ­ ­ 1.9 1.9 Arab Leasing Corporation Finance & Insurance FY02 0.7 ­ ­ 0.7 0.7 Sider-Alfasid Primary Metals FY03 25.0 ­ 25.0 ­ 25.0 Société Générale d'Algérie Finance & Insurance FY99 0.7 ­ ­ 0.7 0.7 70.0 3.5 73.5 Egypt Al-Amir for Sanitary Ware Nonmetallic Mineral Product FY02 5.3 ­ 5.0 ­ 5.0 Production, S.A.E. Manufacturing Alexandria Carbon Black Company S.A.E. Chemicals FY93, 97, 99, 03 27.5 ­ 12.7 3.0 15.6 Alexandria Fiber Co., SAE Textiles, Apparel, & Leather FY04 8.0 ­ 8.0 ­ 8.0 Alexandria National Iron & Steel Primary Metals FY84, 91, 93, 94, 96, 42.6 ­ 4.3 ­ 4.3 Company S.A.E., (ANSDK) 99 Amreya Casting Company Industrial & Consumer Products FY02 5.0 ­ 5.9 ­ 5.9 Club Ras Soma Hotel Company Accommodation & Tourism Services FY94 7.3 0.9 2.3 2.4 4.7 Commercial International Bank S.A.E. Finance & Insurance FY94, 01 15.6 ­ ­ 15.6 15.6 Commercial International Life Finance & Insurance FY00, 04 2.1 ­ ­ 2.0 2.0 Insurance Company S.A.E E.D.F. Port Said East Power S.A.E. Utilities FY01 45.0 152.5 43.9 ­ 43.9 E.D.F. Suez Gulf Power S.A.E. Utilities FY01 45.0 152.5 43.3 ­ 43.3 EFG Hermes Holding SAE Finance & Insurance FY01 15.0 ­ 6.2 ­ 6.2 Egyptian Housing Finance Company Finance & Insurance FY04 1.6 ­ ­ 1.6 1.6 Hussein Choucri Securities & Investment Finance & Insurance FY00 1.4 ­ ­ 1.4 1.4 IT Worx, Inc. Professional, Scientific, & Technical FY01 2.5 ­ ­ 2.5 2.5 Services Lecico Egypt (S.A.E.) Nonmetallic Mineral Product FY04 9.8 ­ 9.8 ­ 9.8 Manufacturing Meleiha Oil Development Oil, Gas, & Mining FY87, 88, 93 41.7 ­ ­ 30.8* 30.8 and Exploration Project Merlon Petroleum Company of Egypt Oil, Gas, & Mining FY04 20.0 ­ 20.0 ­ 20.0 Metro Markets Wholesale & Retail Trade FY03 15.0 ­ 15.0 ­ 15.0 Misr Compressor Manufacturing Industrial & Consumer Products FY92 13.5 ­ 9.7 ­ 9.7 Company, S.A.E. Orascom Construction Industries S.A.E. Nonmetallic Mineral Product FY02 25.0 30.5 25.0 ­ 25.0 Manufacturing Orascom Projects and Touristic Accommodation & Tourism Services FY97, 99 21.8 ­ + ­ + Development S.A.E. ORIX Leasing Finance & Insurance FY97, 02 4.8 ­ 3.1 0.9 4.0 Sekem Holdings Chemicals FY03 5.0 ­ 5.0 ­ 5.0 Sokhna Port Development Company Transportation & Warehousing FY04 20.0 ­ 20.0 ­ 20.0 Unipak Nile Limited Pulp & Paper FY98, 01 8.0 ­ 6.3 ­ 6.3 245.3 60.1 305.5 88 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity MIDDLE EAST AND NORTH AFRICA Iran, Islamic Republic of RAK Ceramics Joint Stock Company Nonmetallic Mineral Product FY04 7.0 ­ 7.0 ­ 7.0 Manufacturing 7.0 ­ 7.0 Jordan Arab International Hotels Company Accommodation & Tourism Services FY00 3.6 ­ ­ 3.6 3.6 Business Tourism Company Limited Accommodation & Tourism Services FY98 5.0 ­ 2.4 ­ 2.4 El-Zay Ready Wear Manufacturing Co. Textiles, Apparel, & Leather FY98 5.0 ­ 1.4 ­ 1.4 Hikma Investment Company Ltd. Chemicals FY87, 91, 93, 95, 03 24.5 ­ 15.1 1.4 16.5 International Luggage Textiles, Apparel, & Leather FY01 8.0 ­ 7.2 ­ 7.2 Manufacturing Company Jordan Gateway Projects Co. Construction & Real Estate FY01 3.0 ­ 3.0 ­ 3.0 Middle East Complex for Engineering, Industrial & Consumer Products FY03 19.0 ­ 19.0 ­ 19.0 Electronics and Heavy Industries PLC Middle East Investment Bank Finance & Insurance FY01 2.2 ­ 2.2 ­ 2.2 Middle East Regional Nonmetallic Mineral Product FY02 5.0 ­ 4.4 0.6 5.0 Development Enterprise Manufacturing Modern Agricultural Investment Transportation & Warehousing FY99 1.0 ­ ­ 1.0 1.0 Company Specialized Investment Compounds Construction & Real Estate FY02 8.0 ­ 4.9 ­ 4.9 Company Plc Zara Investment Holding Accommodation & Tourism Services FY97 18.0 ­ 13.8 3.0 16.7 Company Limited 73.4 9.6 83.0 Lebanon Agricultural Development Co. S.A.L. Food & Beverages FY98 5.0 ­ 2.1 ­ 2.1 Bank of Beirut S.A.L. Finance & Insurance FY98 17.1 ­ 9.7 ­ 9.7 Banque Libano-Française SAL Finance & Insurance FY94, 97, 03 16.0 21.0 2.5 ­ 2.5 Banque Saradar S.A.L. Finance & Insurance FY98, 99 21.0 ­ 3.1 ­ 3.1 Byblos Bank S.A.L. Finance & Insurance FY93, 97, 01, 03 38.8 40.2 18.8 ­ 18.8 Fransabank SAL (Fransabank) Finance & Insurance FY93, 94, 97, 01 16.5 15.4 1.2 ­ 1.2 The Lebanese Ceramic Industries Nonmetallic Mineral Product FY04 5.3 ­ 5.3 ­ 5.3 Manufacturing Lebanese Leasing Company S.A.L. Finance & Insurance FY95, 99, 01 16.2 10.8 2.2 ­ 2.2 Middle East Capital Group Finance & Insurance FY96 3.0 ­ ­ 3.0 3.0 Société Générale Libano-Européenne Finance & Insurance FY94, 97 13.5 17.5 1.9 ­ 1.9 de Banque SAL Société Hôtelière "De Vinci" S.A.L. Accommodation & Tourism Services FY99 3.0 ­ 1.7 ­ 1.7 48.5 3.0 51.5 Morocco Maghreb Management Limited Collective Investment Vehicles FY00 0.0 ­ ­ 0.0 0.0 Maghreb Private Equity Fund Limited Collective Investment Vehicles FY00 5.0 ­ ­ 5.0 5.0 Medi Telecom S.A. Information FY01 88.5 309.7 78.5 ­ 78.5 Settat Filature (SETAFIL) Textiles, Apparel, & Leather FY88, 93 4.4 ­ ­ ­ ­ 78.5 5.0 83.6 Oman United Power Company S.A.O.G. Utilities FY95, 00 20.5 57.0 5.6 5.5 11.1 5.6 5.5 11.1 IFC 2004 ANNUAL REPORT 89 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity MIDDLE EAST AND NORTH AFRICA Pakistan Abamco Limited Collective Investment Vehicles FY95 0.3 ­ ­ 0.3 0.3 AES Lal Pir (Private) Limited Utilities FY95 49.4 ­ 23.7 9.5 33.2 AES Pak Gen (Private) Company Utilities FY96 29.5 48.3 12.7 9.5 22.2 BRR International Modaraba, Ltd. Finance & Insurance FY92, 94, 96 15.8 ­ ­ 0.8 0.8 BSJS Balance Fund Collective Investment Vehicles FY96, 04 1.1 ­ ­ 1.1 1.1 Central Depository Company Finance & Insurance FY93 0.2 ­ ­ 0.2 0.2 of Pakistan Limited Crescent Bahuman Limited Textiles, Apparel, & Leather FY94, 97, 02 23.4 11.5 2.5 5.1 7.6 Dewan Investment and Finance Finance & Insurance FY04 1.0 ­ ­ 1.0 1.0 Company Dewan Salman Fibres Limited Textiles, Apparel, & Leather FY03, 04 35.0 ­ 35.0 ­ 35.0 Engro Chemical Pakistan Limited Chemicals FY91, 97 54.7 14.0 ­ 3.9 3.9 Eni Pakistan Limited Oil, Gas, & Mining FY02 30.0 ­ 24.0 ­ 24.0 Fauji Cement Nonmetallic Mineral Product FY94, 02 32.7 20.0 ­ 0.0 0.0 Manufacturing First International Investment Finance & Insurance FY90, 92, 96 4.7 ­ 0.6 1.5 2.1 Bank Limited First MicroFinanceBank Limited Finance & Insurance FY02 2.7 ­ ­ 2.7 2.7 First UDL Modaraba Finance & Insurance FY96, 04 10.0 ­ 6.7 ­ 6.7 Gul Ahmed Energy Limited Utilities FY96 31.1 35.0 13.5 4.1 17.6 Kohinoor Energy Limited Utilities FY95 31.3 36.6 11.3 6.3 17.6 Maple Leaf Cement Factory Limited Nonmetallic Mineral Product FY94, 96, 97, 02 35.7 35.0 ­ 0.2 0.2 Manufacturing ORIX Investment Finance Finance & Insurance FY96 0.6 ­ ­ 0.6 0.6 Co. Pakistan Ltd. Packages Limited Pulp & Paper FY65, 80, 82, 87, 88, 45.1 20.1 ­ 0.4 0.4 92, 94, 95 Pakistan Industrial & Commercial Finance & Insurance FY94 5.0 ­ 0.2 ­ 0.2 Leasing Pakistan International Container Transportation & Warehousing FY03 9.3 ­ 9.3 ­ 9.3 Terminal Pakistan Petroleum Limited Oil, Gas, & Mining FY83, 85, 95, 02 47.6 86.0 ­ 8.2 8.2 Regent Knitwear (PVT) Limited Textiles, Apparel, & Leather FY94 8.2 2.8 8.3 ­ 8.3 Sarah Textiles Textiles, Apparel, & Leather FY93, 96, 02 7.8 ­ 0.1 ­ 0.1 TRG Pakistan II Limited Information FY04 5.0 ­ ­ 5.0 5.0 Uch Power Limited Utilities FY96 40.0 75.0 28.6 ­ 28.6 176.4 60.3 236.7 Saudi Arabia Saudi Orix Leasing Company (SOLC) Finance & Insurance FY00, 03 1.6 ­ ­ 1.6 1.6 ­ 1.6 1.6 Syrian Arab Republic Arab Drip Irrigation Technology Plastics & Rubber FY01 1.0 ­ ­ 1.0 1.0 Company Limited (Adritec) Bank of Syria and Overseas Finance & Insurance FY02, 04 6.1 ­ ­ 6.0 6.0 Daaboul Company for Chemicals FY02 13.2 ­ 13.2 ­ 13.2 Petrochemicals Industries 13.2 7.0 20.2 Tunisia Banque Internationale Arabe de Tunisie Finance & Insurance FY98, 00, 01, 04 57.6 ­ 50.5 ­ 50.5 Société Industrielle des Textiles (SITEX) Textiles, Apparel, & Leather FY86, 92, 98 14.5 ­ ­ 2.9 2.9 Société Monastirienne International Textiles, Apparel, & Leather FY90,94 5.6 ­ 3.2 ­ 3.2 des Textiles Tuninvest International Limited Collective Investment Vehicles FY98 4.7 ­ ­ 4.3 4.3 53.7 7.2 60.9 90 IFC 2004 ANNUAL REPORT Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity MIDDLE EAST AND NORTH AFRICA West Bank and Gaza Arab Bank Investment Company Finance & Insurance FY96 3.7 ­ ­ 3.7 3.7 for Occupied Territories Arab Bank PLC. Finance & Insurance FY97 + ­ 0.1 ­ 0.1 Arab Concrete Products Company Nonmetallic Mineral Product FY98 0.8 ­ 0.8 ­ 0.8 Manufacturing Commercial Bank of Palestine Finance & Insurance FY97 6.6 ­ 0.1 ­ 0.1 Jericho Motels Company Ltd. Accommodation & Tourism Services FY99 1.2 ­ 1.1 ­ 1.1 Jordan National Bank Finance & Insurance FY97 + ­ 0.4 ­ 0.4 Palestine Industrial Estates Development Construction & Real Estate FY98 2.0 ­ 1.0 1.0 2.0 and Management Company Palestine Mortgage Housing Finance & Insurance FY99 3.0 ­ ­ 3.0 3.0 Corporation Palestine Tourism Investment Company Accommodation & Tourism Services FY99 9.4 ­ ­ 0.5 0.5 Peace Technology Fund Ltd. Collective Investment Vehicles FY99 12.6 ­ ­ 12.6 12.6 Peace Technology Management Ltd. Collective Investment Vehicles FY98 0.2 ­ ­ 0.2 0.2 3.5 21.0 24.5 Yemen, Republic of Aden Company for Silos and Mills Food & Beverages FY99 8.0 ­ 7.8 ­ 7.8 Al-Ahila Mineral Water Company Food & Beverages FY03 1.5 ­ 1.5 ­ 1.5 Radfan Ceramics and Porcelain Nonmetallic Mineral Product FY98 3.8 ­ 1.3 ­ 1.3 Manufacturing Co. Ltd. Manufacturing 10.6 ­ 10.6 Regional Investment Arab Insurance Group Finance & Insurance FY98 6.2 ­ ­ 6.0 6.0 First ANZ International Modaraba Collective Investment Vehicles FY97 5.0 ­ ­ 0.1 0.1 Limited ­ 6.1 6.1 Total equity and loans 792.8 190.9 983.7 Total structured finance (including guarantees) and risk management products 125.2 Total IFC portfolio for Middle East and North Africa 1,108.9 IFC 2004 ANNUAL REPORT 91 Original commitments1 Investments held for IFC2 (US$ millions) (US$ millions) Fiscal Year in which commitments Total Equity Total loans Country, region or other area, and obligor Sector were made Total IFC syndications Loans (at cost) and equity GLOBAL ACCION Investments in Microfinance, SPC Finance & Insurance FY03 3.0 ­ ­ 3.0 3.0 AIG Global Emerging Markets Fund II, L.P. Collective Investment Vehicles FY04 45.0 ­ ­ 45.0 45.0 Baku-Tiblisi-Ceyhan Pipeline Oil, Gas, & Mining FY04 125.0 125.0 125.0 ­ 125.0 Capital International Private Collective Investment Vehicles FY04 30.0 ­ ­ 30.0 30.0 Equity Fund IV, L.P. Centerra Gold Inc. Oil, Gas, & Mining FY95 ­ ­ ­ 7.1 7.1 Emerging Markets Global Collective Investment Vehicles FY04 10.0 ­ ­ 10.0 10.0 Small Capitalization Fund InfrastructureWorld.com Information FY01 5.0 ­ ­ 0.0 0.0 Internationale Micro Investitionen Finance & Insurance FY01, 02, 03 6.7 ­ ­ 6.7 6.7 Aktiengesellschaft LNM Holdings N.V. Primary Metals FY04 100.0 ­ 100.0 ­ 100.0 Novica United, Inc. Information FY03 1.5 ­ ­ 1.5 1.5 Olam International Agriculture & Forestry FY04 15.0 ­ ­ 15.0 15.0 Round 1 Collective Investment Vehicles FY01 2.5 ­ ­ 0.0 0.0 ShoreCap International Finance & Insurance FY04 2.5 ­ ­ 2.5 2.5 State Street Bank and Trust Company Collective Investment Vehicles FY94 10.0 ­ ­ 9.0 9.0 IFC Emerging Markets Common Trust Fund TCW GEM II, Limited Collective Investment Vehicles FY98 10.0 ­ ­ 5.1 5.1 225.0 135.0 360.0 Total equity and loans 225.0 135.0 360.0 Total structured finance (including guarantees) and risk management products 50.0 Total IFC portfolio for Global 410.0 TOTAL EQUITY AND LOANS FOR IFC 13,441.1 3,650.0 17,091.0 TOTAL EQUITY AND LOANS FOR IFC (NET OF WRITE-OFF ADJUSTMENTS)3 13,260.5 3,592.1 16,852.6 TOTAL STRUCTURED FINANCE (INCLUDING GUARANTEES) AND RISK MANAGEMENT PRODUCTS 1,084.9 TOTAL IFC PORTFOLIO FOR ITS OWN ACCOUNT 17,937.5 * The Corporation's investments in unincorporated oil and gas joint ventures (UJVs) are accounted for under the cost recovery method, as more fully described in Note A to the Corporation's FY04 financial statements. For the UJVs, investments held for IFC comprises the sum of the inception to date cash disbursements, net of cash receipts (until cost is recovered) plus the undisbursed balance of signed commitments, net of cancellations. + Less than $50,000 1. Commitments include funds to be provided by IFC for its own account, funds to be provided by participants through the purchase of an interest in IFC's investment, and funds to be provided by other financial institutions in association with IFC, where IFC has rendered material assistance in mobilizing these funds. Original commitments are composed of disbursed and undisbursed balances. The undisbursed portion is revalued at current exchange rate, while the disbursed portion represents the cost of the commitment at the time of disbursement. Loans held for the Corporation are revalued at the current exchange rates. Amounts shown are for commitments outstanding at June 30, 2004, net of cancellations. 2. Investments held for IFC comprise the sum of the disbursed and outstanding balance together and the undisbursed balance of signed commitments, net of cancellations. 3. Of the total $457,791,421 in write-offs for FY04, write-off adjustments are $180,604,154 in loans and $57,828,631 in equity (at cost) for a total of $238,432,786. Note: the operational investments are represented by loans and equity, as stated. In addition, in certain investments, the Corporation has the right to acquire shares and/or participate in the profits of the enterprise. 92 IFC 2004 ANNUAL REPORT Project Manager and Editor Paul McClure Corporate Relations Contributors Joseph O'Keefe, Manager Dana Lane, Chief of Publications Ariadne Garscadden, Information Assistant Declan Heery, Consultant Gemma Lueje, Program Assistant Andre McClean, Intern Web site: Stephan Beauchesne, Anna Bottiglieri, Vincent Yemoh Primary IFC Staff Contributors Translation Philippe Ahoua Irina Likhacheva Arabic: Al-Ahram Center for Faheen Allibhoy Michele Lubrano Translation & Publishing, Cairo Teresa Andaya Nadia Maaze Chinese: China Financial & Economic Anthony Aylward Junko Oikawa Publishing, Beijing Paul Bravery Kaikham Onedamdy French & Spanish: World Bank Nicholas Burke Lory Camba Opem Translation Division, Washington, DC Omar Chaudry Skander Oueslati Julia Chiperfield Sérgio Pimenta Russian: Alex Publishing, Moscow Michael Dompas Andrea Quinones David Donaldson Fereshteh Raissian Design Sabine Durier Randall Riopelle Financial Communications Inc., Kutlay Ebiri Brian Samuel Bethesda, MD James Emery Hillmare Schulze Sara Gann Ellen Schwab Printing Anastasia Gekis William V. Todd S&S Graphics, Laurel, MD Stella Gonzales Erika Veizaga Alison Harwood Mary Beth Ward Photography Peggy Henderson David Wofford Greg Girard Brigid Holleran Wai-Keen Wong Michael Gunawan Emily Horgan Rob Wright Breton Littlehales Lisa Kaestner Linda Young Carlos Madrid Sam Keller Kenji Yuhaku Staff of IFC, World Bank, and MIGA Jung Lim Kim Damla Zeybel Gjergj Konda 2004 ANNUAL REPORT VOLUME 2 At IFC our mandate is to further sustainable economic development through the private sector. We pursue this goal through innovative solutions to the challenges of development, as we invest in companies and financial institutions in emerging markets and as we help build business skills. We consider positive development impact an integral part of good business, and we focus much of our effort on the countries with the greatest need for investment. We recognize that economic growth is sustainable only if it is environmentally and socially sound and helps improve the quality of life for those living in developing countries. THE IFC ANNUAL REPORT ON THE WEB, www.ifc.org/ar2004, is a companion to this printed edition. It provides easy navigation and downloading of data related to IFC investment projects. 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA Telephone 202-473-3800 SHIRES Fax 202-974-4384 KIMBERLY www.ifc.org ISBN 0-8213-5944-4 PRINTED WITH SOY-BASED INKS