Support Foundation Financial statements 2013uuid:416a5418-f6… · The foundation has funds secured until 2016 but is ... The financial statements are presented in euros, which is

Oikocredit International Support Foundation Financial statements 2013

OIKOCREDIT INTERNATIONAL SUPPPORT FOUNDATION 1

Contents Financial statements 2013

Board Report 2

Financial Statements 2013 3

Balance Sheet 3

Income Statement 4

Summary of Accounting Policies 5

Notes to the Financial Statements 7

Notes to the Income Statement 11

Auditors’ Report 17

2 FINANCIAL STATEMENTS 2013

Board report

Developments during 2013 and outlook for 2014

Oikocredit International Support Foundation (“Support Foundation”) is situated in Amersfoort, the Netherlands. The main

purpose of the Support Foundation is to mobilize grant funds to support Oikocredit Ecumenical Development Cooperative

Society U.A, (“Oikocredit”) or one of the related foundations of Oikocredit.

The following were members of the board as at 31 December 2013

Dr. Aris Alip (The Philippines)

Mr. Matt Christensen (United States of America)

Ms. Daira Gómez (Costa Rica)

Ms. Jacinta Hamann de Vivero (Peru)

Ms. Ging Ledesma (The Netherlands)

Mr. Richard Librock (Canada)

Mr. Karsten Löffler (Germany)

Mr. Karen Nazaryan (Armenia)

Mr. Amulike Ngeliama (Tanzania)

Ms. Ylse van der Schoot (The Netherlands)

Ms. Salome Sengani (South Africa)

Ms. Martina Straub (Switzerland)

Ms. Carla Velthuyzen van Zanten (Colombia)

Mr. David Woods (The Netherlands)

The local currency risk funds cover the risks related to Oikocredit’s exposure to loans granted in local currencies. In 2013, the

euro continued to appreciate against most local currencies. The unrealized exchange-rate loss on the local-currency portfolio

amounted to € 20.8 million, of which € 3.5 million was covered by external hedge contracts and € 1.3 million by the loan loss

provision. The remaining part is covered by the local currency risk fund. In return, Oikocredit paid around € 4.9 million in

hedge premiums to the fund, of which approximately € 2 million was used to pay for external hedge premiums.

In September, the Dutch Ministry of Foreign Affairs informed Oikocredit that it would donate their contribution to the revolving

fund (Schokland Fund for Mexico, Central America and the Caribbean) to Oikocredit. The donation has been added to a

separate fund under the Foundation’s general reserves and will be used to continue its activities.

There were no significant changes in other funds in 2013.

It is expected that grants will remain at roughly the same levels in 2014. The foundation has funds secured until 2016 but is

intensifying its efforts to diversify its donor base to ensure that it can continue to meet its partners’ needs in terms of capacity

building and technical assistance.

Amersfoort, the Netherlands, 4 March 2014


Balance sheet as at 31 December 2013

(after appropriation of net income)

Notes 31/12/13 31/12/12

€ ,000 € ,000

ASSETS

Non-current assets

1 Term investments 29,343 29,579

2 Other non-current assets 815 -

Current Assets

Amounts receivable 8 8

3 Current account Oikocredit (622) 12,238

Total assets 29,544 41,825

EQUITY AND FUNDS

General reserve 3 3

Result for the year - -

4 Local Currency Risk Funds 23,943 37,112

5 Other funds (available to cover costs and activities) 5,402 4,226

Total reserves and funds 29,348 41,341

LIABILITIES

Non-current liabilities - 352

Current liabilities 196 132

Total liabilities 29,544 41,825


Income statement for the year 2013

(after appropriation of net income)

Notes 2013 2012

€ ,000 € ,000

INCOME

6 Grants 3,661 2,836

Interest received 693 616

Revaluation term investments (817) 967

Total income 3,537 4,419

EXPENSES

“Category A” subsidized activities and model costs

7 charged by Oikocredit 151 233

8 “Category A” capacity building 2,252 2,666

Contributions to Oikocredit to cover

“Category B” subsidized activities and model costs 50 100

Office expenses 61 61

Charged (addition) to the Local Currency Risk Funds 13,081 745

Charged (addition) to Schokland Projects Mexico

Central America and the Caribbean fund (167) -

Exchange rate differences 102 1

Total expenses (15,530) (3,806)

RESULT FOR THE YEAR (11,993) 613

9 ADDITIONS TO FUNDS 11,993 (613)

RESULT AFTER ADDITIONS TO FUNDS - -


Summary of accounting policies

Description of organization

The Oikocredit International Support Foundation (“Support Foundation”) was established on 10 March 1995 in Amersfoort and

founded in accordance with the laws of the Kingdom of the Netherlands. The duration of the Support Foundation is unlimited.

The main purpose of the Support Foundation is to mobilize grant funds to support Oikocredit Ecumenical Development Co-

operative Society U.A. (“Oikocredit”) or one of Oikocredit’s related foundations. Oikocredit is owned by its members throughout

the world: churches, subdivisions of churches, councils of churches, church-related organizations, partners, members and

support organizations established by individuals and local parishes. Oikocredit’s objective is to mobilize financial credit and

resources from its members as well as from third parties (mainly in developed countries) and to channel the proceeds to partners

in order to raise standards of living in the disadvantaged areas of the world.

Grant funds are used for Oikocredit’s so-called “subsidized and model costs”. These are costs no institution of this size would

make, but which are part and parcel of the Oikocredit cooperative model. The board of the Support Foundation -decided to

take some of these costs for their account (Category A) and endeavor to raise funds to subsidize part of the costs that remain

for Oikocredit’s account (Category B) from 1 January 2000 onwards. The board decided that the part of Oikocredit’s Category

B costs that can be subsidized cannot exceed 15% of the operating costs of Oikocredit.

Category A costs are:

100% of external capacity building to partners

10% (2012: 20%) of technical and organizational assistance to support associations

Category B costs are:

Investor relation costs: besides the category A costs charged to the Support Foundation, the target is to raise subsidies

and grants for another 15% of costs of national support offices and 15% of technical and organizational assistance to

support associations;

Incidental costs: to be decided on a case-by-case basis

The Support Foundation also manages the Local-Currency Risk Funds and guarantee funds. The Local-Currency Risk Funds

are available to offset the risk of currency losses on Oikocredit loans disbursed in local currencies. The guarantee funds are

available for Oikocredit loans deemed to be extremely risky.


ACCOUNTING POLICIES

General information

The annual accounts are prepared in accordance with the statutory provisions of Part 9, Book 2, of the Netherlands Civil Code

and the firm pronouncements in the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting

Standards Board. In general, assets and liabilities are stated in the amounts at which they were acquired or incurred, or fair

value. The financial statements are denominated in euros. If not specifically stated otherwise, they are recognized in the

amounts at which they were acquired or incurred. The balance sheet and income statement include references to the notes.

Income and costs are recognized on an accrual basis.

Foreign currencies

The financial statements are presented in euros, which is the functional and presentation currency of the Foundation. Foreign

currency transactions in the reporting period are translated into the functional currency using the exchange rates prevailing at

the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailing at the

balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the

translation at year-end exchange rates are recognized in the income statement.

Translation differences on non-monetary assets held at cost are recognized using the exchange rates at the dates of the

transactions (or the approximated rates).

Exchange rate differences arising upon the settlement of monetary items are recognized in the income statement in the

period that they arise.

Term investments

Term investments (securities and bonds) are measured and recognized at fair value. Changes in the fair value are directly

taken to the income statement. Other term investments are stated at (amortised) cost, which equals face value.

Grants

Grants are taken to income as realized.

Taxes

The foundation has been exempted from paying corporation tax, value added tax as well as gifts and inheritance taxes.


Notes to the financial statements

1 Term investments in bonds and shares

2013 2012

€ ,000 € ,000

Opening balance as at 1 January 29,579 28,023

Investments less redemptions 711 656

Realized and unrealized results; amortisation to income (817) 967

Exchange-rate differences (130) (67)

Balance as at 31 December 29,343 29,579

Breakdown of bonds and shares 31/12/13 31/12/12

€ ,000 € ,000

4F Fund EURO bonds 1)

22,587 22,670

4F Fund USD bonds 1)

2,860 3,045

TCX, The Currency Exchange FUND N.V., The Netherlands 2)

7,071 7,071

TCX, The Currency Exchange FUND N.V., The Netherlands (1,708) (1,707)

(held for Triple Jump) 2)

TCX, The Currency Exchange FUND N.V., The Netherlands (1,816) (1,816)

(held for the Grameen Foundation) 2)

Donated investments in Oikocredit International Share Foundation 3)

349 316

29,343 29,579

1) 4F Fund

This portfolio consists of fixed-income investments, has a track record and has the following characteristics:

A focus on development: bonds issued by developing countries and by development banks and corporate bonds, whose issuers are

active in developing countries and screened on their particular benefits in developing countries

The bond titles invested in, should have a credit rating of at least Moody’s investment grade;

The investments have a high social/ethical profile, which is monitored through thorough screening by Vigeo Group and guaranteed by

the Ethibel label


On 1 January 2011, Oikocredit transferred the management and the track record of the 4F fund to Institutional Management Services

(IMS) in Amersfoort, the Netherlands.

The fair value of the investment equals the carrying amount.

2) TCX

Oikocredit International Support Foundation’s own investment consists of 10 shares in TCX, the Netherlands (1.6% of total equity). TCX is

an investment fund initiated by the Dutch development organization, FMO, with the purpose of offering hedging facilities for exposure in

the currencies of developing countries. The Support Foundation also holds shares in TCX for Triple Jump and the Grameen Foundation.

The amounts received from these parties have been deducted from the term investments.

The fair value of TCX at least equals the carrying amount.

3) Donated investments

This consists of donated depository receipts of member capital in Oikocredit Ecumenical Development Cooperative Society, U.A,

Amersfoort, The Netherlands.

2 Other non-current assets

The other non-current assets contain an amount of € 815,000 and represent the net participation in Oikocredit loans. These have

been financed by the Schokland Projects Mexico, Central America and the Caribbean fund.

3 Current account Oikocredit

On the current account the interest percentage is equal to the average interest on USD or euro short-term deposits over the year.

4 Local Currency Risk Funds

The Local Currency Risk Funds are used to cover currency losses on local currency loans. The funds originate from grants

from members, as well as grants from third parties.

Philippines Indonesia General Local

Currency

Risk Fund

Africa

Local

Currency

Risk Fund

Southeast

Asia

Local

currency

loans

cumulative

exchange

rate

differences

TOTAL

€ ,000 € ,000 € ,000 € ,000 € ,000 € ,000 € ,000

Balance as at 1 January 1,278 155 20,558 2,705 4,447 7,969 37,112

Addition to / released from fund 988 273 6,208 110 (30) (20,718) (13,169)

Balance as at 31 December 2,266 428 26,766 2,815 4,417 (12,749) 23,943


To cover the risks related to Oikocredit’s exposure to loans granted in local currencies, the Oikocredit International Support

Foundation has established the Local Currency Risk Funds. Accumulated losses or profits on the difference between the

value of local currency loans, including interest, (should such domestic currency loans have been granted in euros) and the

actual value of domestic currency repayments and interest received by Oikocredit as exchanged in euros, will be added to the

Local Currency Risk Fund.

Local-currency loans cumulative exchange-rate differences account

The cumulative exchange-rate differences account exists for local-currency loans which have not yet matured. The difference

in interest rates agreed with Oikocredit partners for these local currency loans and interest rates in euros (if such loans had

been granted in euros) are added or charged to this account. Exchange-rate differences on local-currency loans when

translated to euros are also charged or added to this account.

If losses or profits are realized when the loans in local currencies have matured, the cumulative profits or losses will be taken

out of this cumulative exchange-rate difference account and charged or added to the specified Local Currency Risk Fund

mentioned above.

5 Other funds (available to cover Oikocredit costs and activities)

The funds (as mentioned below) originate from grants received for the purposes as described per fund. The Support

Foundation charges the related Oikocredit costs to the funds, (the costs charged to these funds are Category A, B and other

costs). Please refer to the summary of accounting policies for an explanation of Category A and B costs.

The funds below originate from grants received for purposes described for each separate fund below. The Support Foundation

charges the related A and B costs to these funds. Please refer to the general information (note 1) for an explanation of

Category A and B costs.

Can be specified as follows 2013 2012

€ ,000 € ,000

Funds for subsidized activities and model costs 1,425 1,592

Capacity building, partner financing and guarantee funds 3,977 2,634

Balance as at 31 December 5,402 4,226


Funds for subsidized activities and model costs

Donated

investments 1)

Funds for

subsidized activities

and model costs 2)

TOTAL

€ ,000 € ,000 € ,000

Balance as at 1 January 312 1,280 1,592

Addition to / released from fund 45 (212) (167)

Balance as at 31 December 357 1,068 1,425

1) This fund was established to account for donated shares.

2) This fund was set-up in 1999 to cover Oikocredit’s subsidized activities and model costs.

Capacity building and guarantee funds

Capacity building

Africa &

Southeast Asia 1)

Capacity

building

funds 2)

General

guarantee

funds 3)

Guarantee

Fund for

Africa 3)

Schokland

capacity

building 4)

Schokland

project

MCAC 5)

TOTAL

€ ,000 € ,000 € ,000 € ,000 € ,000 € ,000 € ,000

Balance as at 1 January (103) 222 1,274 1,226 15 - 2,634

Addition to / released from fund 102 (178) (5) (4) 16 1,412 1,343

Balance as at 31 December (1) 44 1,269 1,222 31 1,412 3,977

1) This fund originates from the Church of Sweden Aid and was set-up in 2004 for capacity building of existing and potential partners and

feasibility studies of potential partners in Africa and Southeast Asia.

2) This fund was set-up for capacity building of existing and potential partners and feasibility studies of potential partners in all countries.

3) The two guarantee funds were established to enable institutional donors and individuals to participate in a fund that insures part of the

credit risk (equity or loan and accumulated interest) of partners to be financed by Oikocredit. For the addition to these funds we refer to

note 8.

4) The Schokland capacity building fund was set-up for capacity building of existing and potential partners and feasibility studies of potential

partners in Mexico, Central America and the Caribbean.

5) This fund is the continuation of the Schokland fund to finance partners in the region Mexico, Central America and the Caribbean.


NOTES TO THE INCOME STATEMENT

6 Grants

2013 2012

€ ,000 € ,000

Grants received from the Dutch government 1,281 -

Grants received from ICCO 1,280 2,000

Grants received from the Church of Sweden 852 873

Other grants received 248 (37)

Total grants 3,661 2,836

7 Category A subsidized activities and model costs charged by Oikocredit

(For a description of Category A costs we refer to the summary of accounting policies)

2013 2012

€ ,000 € ,000

Non-banking and model costs 151 233

Travel costs members - -

Total Category A subsidized activities and model costs charged by Oikocredit 151 233


8 Category A capacity building

(For a description of Category A costs we refer to the summary of accounting policies)

2013 2012

€ ,000 € ,000

Capacity building unit 272 445

Africa 655 677

Southeast Asia 178 157

South and Central America 733 763

Central and Eastern Europe 73 92

Terrafina 341 532

Total Category A capacity building costs 2,252 2,666

9 Additions to and releases from funds

2013 2012

€ ,000 € ,000

Local Currency Risk Fund the Philippines

Exchange rate differences on invested funds (4) -

Exchange rate differences local currency loans repaid 998 800

Interest added (6) 43

Released from / addition to fund 988 843

Local Currency Risk Fund Indonesia






Local Currency Risk Fund general

Grants received 122 -

Exchange rate differences on invested funds (72) (2)

Exchange rate differences local currency loans repaid 6,236 1,980


Released from / addition to fund 6,208 2,943

Local Currency Risk Fund Africa





Local Currency Risk Fund Southeast Asia

Exchange rate differences on invested funds (15) (1)

Exchange rate differences local currency loans repaid - 21


Released from / addition to fund (30) 239

Local Currency Risk Fund unrealized exchange rate differences

Addition exchange rate differences local currency loans repaid (7,636) (2,873)

Addition exchange rate differences (13,082) (745)

Released from / addition to fund (20,718) (3,618)

Members’ travel fund

Other costs - -

Released from / addition to fund - -

Donated investments

Grants received 45 63



Subsidized activities and model costs


Interest received allocated to fund (4) 71

Category A costs1)

(151) (233)

Other costs; office expenses (111) (160)

Released from / addition to fund (212) (265)

Capacity building Africa & Southeast Asia


Non-allocated grants (20) -

Other costs (446) (685)

Released from / addition to fund 102 (103)

Capacity building funds

Grants received 1,639 2,314

Non-allocated grants (29) -


Other costs (1,787) (1,946)


Guarantee funds general

Grants received - -



Guarantee fund Africa




Schokland capacity building fund

Grants received 21 (180)

Interest added - 6

Other costs (5) (32)

Released from / addition to fund 16 (206)

Schokland projects Mexico, Central America and the Caribbean

Grants received 1,260 -

Interest added (2) -

Other costs 154 -

Released from / addition to fund 1,412 -

TOTAL ADDITION TO FUNDS (11,993) 613

1)

A definition of Category A and Category B costs is included in the summary of accounting policies under the note “Description of the

organization”.

10 Employees

In 2013 no employees were employed by the foundation.

11 Audit fees

2013 2012

The following audit fees were expensed in the income statement in the reporting period

€ 000 € 000

Audit of financial statements 4 4

Tax services - -

4 4


12 Related party transactions

Transactions with Oikocredit Foundations during the year

Material transactions with Oikocredit EDCS U.A.: during 2013, € 150,669 of category A costs was directly paid to the

Oikocredit EDCS U.A. (2012: € 233,011).

Oikocredit International Support Foundation paid costs related to subsidized activities and ‘model costs’ (category B costs) to

Oikocredit EDCS U.A. for subsidized activities and model costs amounting to € 50,000 (2012: € 100,000).

Oikocredit International Support Foundation paid unrealized cumulated exchange rate differences on local currency loans to

Oikocredit EDCS U.A. for local currency loans cumulative exchange rate differences amounting to € 16.0 million (2012:

€ 4.4 million).

13 Other information

Allocation of results

The net result is allocated by the board of the Foundation to the funds. The result for 2013 of € 11,993,000 has been allocated

to the funds.

Subsequent events

There are no subsequent events.



Documents

Support Foundation Financial statements 2013uuid:416a5418-f6… · The foundation has funds secured until 2016 but is ... The financial statements are presented in euros, which is