ICD Marketing PresentationOctober 2005

Ramadan 1426

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Presentation Outline

General Background

Working with ICD

Investment Guidelines

Portfolio Review

ICD Performance

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Mission & Proposed Vision

Vision The Islamic Corporation for the Development of the

Private Sector (ICD) strives to be a major player in the development and promotion of the private sector in OIC member countries.

Mission To complement the role played by the IDB in promoting

social and economic growth and prosperity through:

Providing Islamic financial services & products. Promoting competition and entrepreneurship in member

countries. Encouraging cross border investments. Advising governments & businesses.

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Type: multilateral financial institution.

Authorized capital: US$ 1 billion.

Capital available for subscription: US$ 500 million.

Headquarters: Jeddah, Kingdom of Saudi Arabia.

Capital structure

Member Countries

30%

IDB50%

PublicFinancial

Institutions20 %

ICD’s Capital Structure

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Shareholders of ICDCountries1. Algeria2. Azerbaijan3. Bahrain4. Bangladesh5. Benin6. Brunei Darussalam7. Burkina Faso8. Cameroon9. Djibouti10. Egypt11. Gambia12. Guinea13. Guinea Bissau14. Indonesia15. Iran16. Iraq17. Jordan18. Kazakhstan19. Kyrgyzstan20. Kuwait21. Lebanon22. Libya

ISLAMIC DEVELOPMENT BANK

Public Institutions Iran Foreign Investment Co.Bank Kesharvazi (Iran)Bank Melli (Iran)Saudi Public Investment Fund (Saudi Arabia)Banque Nationale D’Algerie

Shareholders as of 06/2005

23. Malaysia24. Maldives25. Mali26. Mauritania27. Mozambique28. Niger29. Pakistan30. Palestine31. Qatar32. Saudi Arabia33. Senegal34. Sierra Leone

35. Sudan36. Suriname37. Syria38. Tajikistan39. Tunisia40. Turkmenistan41. Uganda42. UAE43. Uzbekistan44. Yemen

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Objectives

Provide a wide range of financial products and services to Private Sector projects of high potential and contribution to growth in Islamic countries.

Mobilize additional resources for the private sector development.

Encourage the development of Islamic financing and capital markets.

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Direct Financing

Structured Finance

Advisory Services

Asset Management

Products & Services

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Presentation Outline

Portfolio Review

Working with ICD

Investment Guidelines

General Background

ICD Performance

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Accumulated approvals in USD m

37.235.2957

64.1

105 91.82

193.6

136.6

72.535.29

298.7

390.5

0

50

100

150

200

250

300

350

400

1421 1422 1423 1424 1425 1426Q2

Yearly Accumulated

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Accumulated number of projects approved since inception

510

21

32

41

55

0

10

20

30

40

50

60

1421 1422 1423 1424 1425 1426

Year

Nu

mber

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Accumulated disbursement in USD m

20.4920.49

28.99

49.48

24.79

74.27 72.46

146.73

13.01

160

0

20

40

60

80

100

120

140

160

Am

ount U

SD

mm

1422 1423 1424 1425 1426

Year

Disbursements Accumulated

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ICD operations are diversified

Marketing Operations Targets

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Portfolio by sector

Industrial30%

Education4% Aviation

9%Technology

5%

Financial19%

Services1%

Oil & Gas5%

Health Services8%

Telecom14%Pharmaceuticals

5%

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Portfolio by country

Iran15.5%

Saudi Arabia12.3%

Syria8.7%

Egypt4.5%

Djibouti1.2%

Sudan8.5%

Bahrain4.8%

Pakistan7.0%

UAE5.3%

Turkey1.5%

Regional8.4%

Malaysia0.9%

Mauritania2.1%

Yemen6.5%

Azerbaijan2.1%

Lebanon2.1%

Kazakhstan2.4%

Jordan6.0%

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Portfolio by mode of financing

Leasing41.7%

Murabaha0.5%

Inst. Sale28.7%

Equity20.0%

Financing Line8.4%

Istisna'a0.7%

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Presentation Outline

Investment Guidelines

Working with ICD

General Background

Portfolio Review

ICD Performance

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Areas of Focus

Modern Manufacturing

ICT and Power

Health & Education

Financial Sector

SME’s Development

Advisory Services

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Company Eligibility: Promising private sector projects introduced by

experienced entrepreneurs or promoters. Public sector enterprises under privatization .

Eligible enterprises should have: majority voting stock in the hands of private investors,

from member countries. an appreciable contribution to the local economy or intra-

regional trade.

Investment Guidelines (1)

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Term financing: For “Greenfield” projects: 40% of project investment cost For expansion of existing projects: 50% of project investment

cost. Tenure: up to 7-8 years including Grace/Gestation period. Minimum project size: US$ 5m. (Except for projects financed

from lines).

Equity Investments: Maximum participation: 33% of investee’s capital. Clear exit strategy within 3-5 Years. Equity projects should not have more than 30% interest bearing

debt.

Investment Guidelines (2)

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Security & Guarantees:

Various types of security or guarantees are accepted by ICD:

Mortgages/pledges. Assignment of receivables. Corporate guarantees from parent companies. Personal guarantees Bank guarantees.

Investment Guidelines (3)

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Presentation Outline

Working with ICD

General Background

Investment Guidelines

Portfolio Review

ICD Performance

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Working with ICD (1)

Sponsor will have to send a feasibility study emanating from a recognized source of expertise, including: A short project description (new or expansion, project concept,

country, implementation time frame, etc); Summary of project cost and financing plan (debt/equity); Amount and purpose of the financing requested from ICD; The project’s market potential; Ownership and organizational structure; Proposed collateral or guarantees.

ICD usually conveys an initial reaction after about 2 weeks.

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Once all necessary information is received, the due diligence exercise would start and would typically entail site visits, involvement of consultants and desk work.

Once finalized, the project appraisal is submitted to the Board of Directors of ICD.

Time needed for due diligence depends on several factors. A period of between 4 – 6 months is standard.

Normally, one-third of projects approved for due diligence would reach ICD Board of Directors.

Working with ICD (2)

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Islamic Corporation for the Development of the Private Sector (ICD)

P.O. Box : 54069, Jeddah 215514, Saudi ArabiaTelephone : (966-2) 644 1644Fax : (966-2) 644 4427E-mail : icd@isdb.orgWebsite : http//www.icd-idb.org

Contacts

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Presentation Outline

Working with ICD

General Background

Investment Guidelines

Portfolio Review

ICD Performance

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Clean Audit Report.

Clean Sharia’a Report.

Gross Revenues Increase by 44% as compared to LY.

Core Investment Portfolio Revenues increased by 94% as compared to LY.

Liquid Investment Portfolio Revenues decreased by 42% as compared to LY.

Expenses increased by 18% as compared to LY.

Net Profit Increase by 167% as compared to LY.

Members’ Equity Increase by 11% as compared to LY.

ICD 1425H Annual Report Highlights

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3 Years Balance Sheet

 (USD Millions) 1423 1424 1425Total Core Investment Portfolio

44.11

65.74

160.98

Total Liquid Assets Portfolio

223.51

204.28

121.46

Total Other Assets

9.79

14.96

31.87

TOTAL ASSETS

277.41

284.98

314.31

Total Members’ Equity

274.59

281.88

311.86

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3 Years Income Statement

  (USD Millions) 1423 1424 1425

Core Investment Portfolio

4.68

8.74

16.97

Liquid Assets Portfolio

3.42

4.89

2.82

Services Revenue

0.76

0.47

0.58

Total Revenue

8.86

14.10

20.37

Expenses

7.92

11.61

13.71

Net Income

0.93

2.50

6.67

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Ratios - Financials

Profitability Ratios(USD Millions) 1423 1424 1425

Revenue per staff member (000’s)

285.72

381.11

433.49

Net Income to Revenue 10.55% 17.70% 32.72%

Core Revenue to Investment 10.60% 13.29% 10.54%

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Performance Comparison Between ICD & Similar Institutions

 ICD

1425IIC

2003AFIC 2002

Total Revenue 20.37

21.95 6.28

Expenses 13.71 19.78 4.26

Net Income 6.67 2.17 1.85

Total Assets 314.31 426.2N/A

IIC: Inter-American Investment Corporation

AFIC: Asian Finance & Investment Corporation

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Thank you

Back-up Slides

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Leasing (Ijara)• ICD buys capital goods and gives the beneficiary usufruct rights

for a period of time against payment of fixed periodical rentals. Repayment can start after a grace period. Ownership is transferred at the end of the rental period.

Installment Sale• ICD buys capital goods and resells them to the beneficiary at a

price agreed by the two parties. The repayment is made through consecutive installments. A grace period can be accorded.

Sale Contract (Istisna’a & Parallel) • Istisna’a is a contract whereby ICD agrees to

manufacture/acquire an asset, based on a specific order received from a client, and then, once manufactured, sells the said asset (through installments), to that client for an agreed price.

Modes of Financing

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Equity• This is the purest form of Islamic financing where ICD would

share the project’s risks and benefits. Quasi – Equity

• ICD can provide for a term financing facility that could be converted (at certain conditions) into equity, at some stage of the project life.

Modes of Financing

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Net Accumulated approvals in USD m

35.29 27.855.44 53.53

112.23

35.2963.09

118.53

172.06

284.29

0

50

100

150

200

250

300

1421 1422 1423 1424 1425

Year

Yearly Approval Accumulated Approval

Net of cancelled Projects