IFC FINANCIALS AND PROJECTS 2013

THE POWER OF PARTNERSHIPS

IFC Financials and Projects 2013

Table of Contents
MANAGEmENT’S DISCUSSION ANd ANALYSIS Overview of Financial Results Client Services Liquid Assets Funding Resources Enterprise Risk Management Critical Accounting Policies Results of Operations Governance and Control 2 2 5 12 13 14 21 22 29

CONSOLIdATEd FINANCIAL STATEmENTS ANd INTERNAL CONTROL REPORTS Management’s Report Regarding Effectiveness of Internal Control over External Financial Reporting Auditors’ Report on Management’s Assertion on Effectiveness of Internal Control over External Financial Reporting Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Capital Consolidated Statements of Cash Flows Consolidated Statement of Capital Stock and Voting Power Notes to Consolidated Financial Statements Independent Auditors’ Report

32 32

34 36 37 38 39 40 42 43 100

PROJECT COmmITmENTS

103

INVESTmENT PORTfOLIO Statement of Cumulative Gross Commitments

126

NOTES ANd DEfINITIONS

130

mobilizing capital in international financial markets. 2015. the non-­ IFC portion of structured finance transactions which meet core mobilization criteria. guarantees and other receivables Foreign currency transaction gains and losses on non-­ trading activities Advisory services expenses.2_ IFC Financials anD ProJecTs 2013 Management’s Discussion and Analysis I.5  billion. IFC’s accounting policies are discussed in more detail in Section VI. It is a legal entity separate and distinct from IBRD. Such statements involve a number of assumptions and estimates that are based on current expectations.” “believes.0 billion to allow for possible prefunding during FY14 of the funding program for the year ending June 30. are primarily denominated in US dollars. IFC helps developing countries achieve sustainable growth by financing private sector investment. the International Development Association (IDA). and the International Centre for Settlement of Investment Disputes (ICSID). actual future results could differ materially from those currently anticipated. management. 2013 (FY13 Consolidated Financial Statements). For FY14. 2013 (FY13). with its own Articles of Agreement. IFC seeks to minimize foreign exchange and interest rate risks by closely matching the currency and rate bases of its assets in various currencies with liabilities having the same characteristics. IDA. net Overall change $ (582) (474) (216) (214) (157) 132 178 1. financial structure. and providing advisory services to businesses and governments.079) (126) (110) (91) (77) 154 187 251 (58) $ (949) Increase (decrease) FY12 vs FY11 Unrealized losses on equity investments Other-­ than-temporary impairments on equity investments Income from liquid asset trading activities Gains on non-­ monetary exchanges of equity investments Provisions for losses on loans. Such means principally comprise: loan participations. IFC’s principal investment products are loans and equity investments. FINANCIAL PERfORmANCE SUmmARY From year to year. sales of loans. subject to completion of its FY14 program.” “expects.” “plans” or words of similar meaning. and up to $2 billion to allow for possible prefunding during FY13 of the funding program for the year ending June  30. OVERVIEW OF FINANCIAL RESULTS International Finance Corporation (IFC or the Corporation) is an international organization. 2012 (FY12) and $2. The decrease in income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA in FY13 when compared to FY12 and in FY12 when compared to FY11 was principally as a result of the following (US$ millions): Increase (decrease) FY13 vs FY12 Realized capital gains on equity investments Provisions for losses on loans. IFC’s entire share capital was held by 184 member countries. IFC has an authorized borrowing program of up to $13. IFC’s capital base and its assets and liabilities. IFC raises virtually all of the funds for its lending activities through the issuance of debt obligations in the international capital markets. IFC does not accept host government guarantees of its exposures. MIGA. (collectively Core Mobilization). IFC had an authorized borrowing program of up to $10  billion. to further economic growth in its developing member countries by promoting private sector development. For the year ended June 30. The Management’s Discussion and Analysis contains forward looking statements which may be identified by such terms as “anticipates. Consequently. IFC also plays an active and direct role in mobilizing additional funding from other investors and lenders through a variety of means. As of June 30. IFC is a member of the World Bank Group. 2014 (FY14). guarantees and other receivables Advisory services expenses. established in 1956.263 (77) $ (147) Net gains on other non-­ trading financial instruments accounted for at fair value totaled $422 million in FY13 (net losses of $219 million in FY12 and net gains of $155  million in FY11) resulting in income before grants to IDA of $1. Results of Operations. BASIS Of PREPARATION Of IFC’S CONSOLIdATEd FINANCIAL STATEmENTS The accounting and reporting policies of IFC conform to accounting principles generally accepted in the United States (US GAAP). Such factors are detailed more fully in Section VII. Membership in IFC is open only to member countries of IBRD. net Overall change $ ( 1. which also comprises the International Bank for Reconstruction and Development (IBRD). Unlike most other development institutions.” “intends. net Expense from pension and other postretirement benefit plans Unrealized gains on equity investments Income from liquid asset trading activities Other-­ than-temporary impairments on equity investments Other. and staff. the non-­ IFC portion of commitments in IFC’s initiatives. and the non-­IFC investment portion of commitments in funds managed by IFC’s wholly owned subsidiary. net Foreign currency transaction gains and losses on non-­ trading activities Realized capital gains on equity investments Other. IFC generally manages non-­equity investment related and certain lending related residual currency and interest rate risks by utilizing currency and interest rate swaps and other derivative instruments. other than its equity investments. IFC Asset Management Company LLC (AMC). parallel loans. IFC reported income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA of $928 million in FY13. as compared . up to $2.024 million in the year ended June 30. as compared to $1. and ICSID. 2011 (FY11). with smaller debt securities and guarantee portfolios. and. Equity investments are funded from net worth. the Multilateral Investment Guarantee Agency (MIGA). which are subject to risks and uncertainties beyond IFC’s control. Critical Accounting Policies.350 million in FY13. and in Note A to IFC’s Consolidated Financial Statements as of and for the year ended June  30. share capital. 2013.877 million in the year ended June 30. IFC’s net income is affected by a number of factors that can result in volatile financial performance. while maintaining a small borrowing window with IBRD.

638 (438) (42) 1. Net loss attributable to noncontrolling interests totaled $8 million in FY13 ($0 in FY12 and FY11).328 $ 1.ManagemenT’s Discussion anD Analysis _3 to $1.579 $ 1.018 $ 1.059 $ 938 (117) $ 877 40 $ 801 $ 871 2013 2012 2011 2010 2009 (243) 752 (155) 1.658 (330) 1.746 .579 — (450) $ (151) — (151) $ 1. as compared with $1.058) — 71 474 108 815 500 (220) 529 (140) (163) (488) 239 101 106 928 422 1.179 (600) 1.018 million in FY13. Results of Operations.457 1. IFC’s financial performance is detailed more fully in Section VII.946 (200) 1.290 28 990 14 $ 1.746 — 2.328 million in FY12 and $1.179  million in FY11.877 (219) 2. net income attributable to IFC totaled $1. as compared to $330 million in FY12 and $600  million in FY11.285 (339) (153) 452 385 1. Grants to IDA totaled $340 million in FY13. Accordingly.024 155 2.579 million in FY11.658  million in FY12 and $2. The table below presents selected financial data for the last five fiscal years (in millions of US dollars.464 (128) 274 454 280 (218) (6) 46 240 285 (203) (2) (299) 311 248 (441) (8) 5 (692) — 81 313 (181) (1.350 (340) 1.000 3 737 217 1.328 — (350) 1.010 8 (240) 1. except where otherwise stated): As of and for the years ended June 30 Net income highlights: Income from loans and guarantees (Provision) release of provision for losses on loans & guarantees Income (loss) from equity investments Of which: Realized gains on equity investments Gains on non-­ monetary exchanges Unrealized gains (losses) on equity investments Dividends and profit participations Other-­ than-temporary impairments Fees and other Income from debt securities Income from liquid asset trading activities Charges on borrowings Other income Service fees Advisory services income Other Other expenses Administrative expenses Advisory services expenses Expense from pension and other postretirement benefit plans Other Foreign currency transaction gains (losses) on non-­ trading activities Income (loss) before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA Net gains (losses) on other non-­ trading financial instruments Of which: Realized gains Gains on non-­ monetary exchanges Unrealized gains (losses) Income before grants to IDA Grants to IDA Net income (loss) Less: Net loss attributable to noncontrolling interests Net income (loss) attributable to IFC 35 2 11 10 63 22 70 5 6 — 45 407 299 (845) (351) (173) (32) 35 (798) (290) (96) (23) 145 (700) (153) (109) (19) (33) (664) (108) (69) (12) (82) (582) (134) (34) (14) 10 101 60 269 119 88 — 134 70 — 39 — 114 921 6 26 2.

8% 10.3 16% 1. Parallel use of the capital to risk-­ weighted assets ratio has now been discontinued.106 $ 18.359 17. as a percentage of paid-in share capital and retained earnings (before certain unrealized gains and losses and excluding cumulative designations not yet expensed) averaged for the current period and previous fiscal year. Paid-in capital plus retained earnings net of designated retained earnings plus general and specific reserves against losses on loans.214 25.9 14.869 $ 22. net of associated derivatives Investments Borrowings outstanding. Total reserves against losses on loans to total disbursed loan portfolio is defined as reserve against losses on loans as a percentage of the total disbursed loan portfolio at the end of the fiscal year. Net income excluding unrealized gains and losses on certain investments accounted for at fair value.4% 1.2 3.490 $ 61. Net 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. (ii) 30% of committed guarantees. 4.8 4.9% 4.372 513 — 2. IFC’s objective is to maintain a minimum level of liquidity.3 14% 44% 10.8% 6. As of FY13 Q3. and (iii) 30% of committed client risk management products. It is computed as the aggregation of risk-­ based economic capital requirements for each asset class across the Corporation.677 44.121 38 2. Net income for the fiscal year as a percentage of the average of total capital (excluding payments on account of pending subscriptions) at the end of such fiscal year and the previous fiscal year.8 10% n/a 12. as a percentage of total disbursed loan and equity investments (net of reserves) at cost.6% 3. This is the level of available resources under IFC’s risk-­ based economic capital adequacy framework. consisting of proceeds from external funding to cover at least 65% of the sum of (i) 100% of committed but undisbursed straight senior loans.369 711 — 1.438 44. 10. The Board of Directors has approved the use of a risk-­ based economic capital framework beginning in the year ended June 30. Certain financial ratios.4% (0. AOCI.9%) (3.0 2.5 19.6 1. liquid assets net of repos. 13. The ratio does not include designated retained earnings reported in total capital on IFC’s consolidated balance sheet. The ratio of capital (including paid-­ in capital.864 22.1:1 7. both on. 90% of total resources available less total resources required.6% 2. and net gains and losses on non-­ trading financial instruments accounted for at fair value.8% 3.8 1. are calculated excluding the effects of unrealized gains and losses on investments.0% 83% 266% 2. other non-­ trading financial instruments.944 31.6:1 6.6:1 7. Net income excluding unrealized gains and losses on certain investments accounted for at fair value.4_ IFC Financials anD ProJecTs 2013 As of and for the years ended June 30 Consolidated balance sheet highlights: Total assets Liquid assets. 6.202 — 2.517 29. 2.369 1.3% 0.525 $ 75.934 38. retained earnings. IFC’s management decided to modify the External Funding Policy by eliminating the cap on the operational range of 65% to 85%.2% 1.001 25.5% 9. including fair value adjustments Total capital Of which: Undesignated retained earnings Designated retained earnings Capital stock Accumulated other comprehensive income (AOCI) Noncontrolling interests Financial ratios:1 Return on average assets (GAAP basis)2 Return on average assets (non-­ GAAP basis)3 Return on average capital (GAAP basis) 4 Return on average capital (non-­ GAAP basis)5 Cash and liquid investments as a percentage of next three years’ estimated net cash requirements External funding liquidity level 6 Debt to equity ratio7 Total reserves against losses on loans to total disbursed portfolio 8 Capital measures: Capital to risk-­ weighted assets ratio9 Total Resources Required ($ billions)10 Total Resources Available ($ billions)11 Strategic Capital12 Deployable Strategic Capital13 Deployable Strategic Capital as a percentage of Total Resources Available 2013 2012 2011 2010 2009 $ 77. Total resources available less total resources required.403 1. Leverage (Debt/equity) ratio is defined as the number of times outstanding borrowings plus outstanding guarantees cover paid-­ in capital and accumulated earnings (net of retained earnings designations and certain unrealized gains/losses). 12.580 24.373 322 $ 16.543 — 2.7:1 6.8 3.237 34. and portfolio (general) loan loss reserves) to risk-­ weighted assets. 3.2% 6. .2:1 7.4 17.761 $ 6 8.and off-­ balance sheet. and other assets averaged for the current period and previous fiscal year. 11.665 $ 20.711 $ 16.7 8% n/a 15. 9.721 31.435 278 $ 17. income from consolidated VIEs.032 335 $ 14.075 $ 51. and net gains and losses on non-­ trading financial instruments accounted for at fair value.8 9% n/a 14. 5.7 1.1% 3. 7.279 21.4% n/a 16. as described below.0%) 75% 163% 2.369 1. 8.275 29.483 31.1% 77% 309% 2.8% 71% 190% 2. income from consolidated VIEs.9% 77% 327% 2.8 16.8 20.5 3.3%) (1.211 $ 20.122 $ 18. and impacts from consolidated Variable Interest Entities (VIEs).251 791 2.1% 11.9 3.8% 8.1%) (0.8% 2. The minimum capital required consistent with the maintenance of IFC’s AAA rating. 2008 (FY08).9 2.307 481 $ 12.

and obtain financing in particular currencies. encourage entrepreneurship. structured finance. health. IFC has five strategic focus areas: »»strengthening the focus on frontier markets »»addressing climate change and ensuring environmental and social sustainability »»addressing constraints to private sector growth in infrastructure. emerging market banks. and also through private equity funds. IFC’s three businesses are: Investment Services. funds. or commodity-­ price exposures. and other financial institutions for on-­ lending. with IFC’s resources to finance certain projects. IFC’s financing products are tailored to meet the needs of each project. and the food-­ supply chain »»developing local financial markets »»building long-­ term client relationships in emerging markets For all new investments. and opportunities to support corporate governance and enhanced social responsibility. structured liquidity facilities. 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. education. as the projects mature. Investment Products IFC fosters sustainable economic growth in developing countries by financing private sector investment. and Asset Management. and Islamic finance. client risk management services. portfolio risk transfer. CLIENT SERVICES BUSINESS OVERVIEw IFC carefully supervises its projects to monitor project performance and compliance with contractual obligations and with IFC’s internal policies and procedures. including Global Trade Supplier Finance. currency. Investment Services product lines include: loans. typically for seven to twelve years. insurance companies. INVESTmENT SERVICES IFC’s investments are normally made in its developing member countries. IFC’s loans traditionally have been denominated in the currencies of major industrial nations. equity investments. profit participation features. Working Capital and Systemic Solutions and Global Trade Structured Trade. typically from donor partners. IFC generally invests between 5 and 20 percent of a company’s equity. conversion features. Advisory Services. IFC provides a range of financial products and services to its clients to promote sustainable enterprises. securitizations. IFC invests directly in companies’ equity. IFC assesses the quality of the development benefits realized. and/or are in the process of being totally or partially privatized. Debt Securities — ​ Investments typically in the form of bonds and notes issued in bearer or registered form. and blended finance. IFC’s strategic focus areas are aligned to advance the World Bank Group’s global priorities. Separately. Client Risk Management Services — I ​ FC provides derivative products to its clients to allow them to hedge their interest rate. the Global Trade Liquidity Program (GTLP) and Critical Commodities Finance Program (CCFP) provides liquidity for trade in developing countries. . The Articles of Agreement mandate that IFC shall invest in productive private enterprise. Blended Finance — ​ IFC combines concessional funds. extend maturities. Loan Participations — ​ IFC’s loan participation program mobilizes capital from international commercial banks. trade finance. IFC’s investment project cycle can be divided into the following stages: »»Business Development »»Concept Review »»Appraisal (Due Diligence) »»Investment Review »»Negotiations »»Public Disclosure »»Board of Directors Review and Approval »»Commitment »»Disbursement of funds »»Project Supervision and Development Outcome Tracking »»Evaluation »»Closing Loans — ​ IFC finances projects and companies through loans. IFC has also commenced a number of other Trade and Supply Chain Finance-­ related programs. leasing companies. loan participations. and development-­finance institutions for development needs. mobilizing capital in the international financial markets. and providing advisory services to businesses and governments. IFC intermediates between clients in developing countries and derivatives market makers to provide such clients with access to risk-­ management products. IFC also makes loans to intermediary banks. operate free of host government control in a market context and according to profitability criteria. Structured Finance — ​ IFC uses structured and securitized products to provide forms of financing that may not otherwise be available to clients to help clients diversify funding. warrants and other types of instruments in managing its equity investments. and. IFC also invests in preferred shares and uses put and call options. Trade and Supply Chain Finance — I ​ FC’s Global Trade Finance Program (GTFP) guarantees trade-­ related payment obligations of approved financial institutions. securitized debt obligations and preferred shares that are mandatorily redeemable by the issuer or puttable by IFC are classified as debt securities in IFC’s consolidated balance sheet. Equity — I ​ FC’s equity investments provide developmental support and long-­ term growth capital for private enterprises.ManagemenT’s Discussion anD Analysis _5 II. Global Warehouse Finance Program. and mobilize resources that wouldn’t otherwise be available. Products include partial credit guarantees. but has a growing local currency product line. IFC articulates the expected impact on sustainable development.

multilateral and bilateral development institutions. as well as industry-­ specific investment climate reform. national development agencies and international financial institutions. Advisory Services make a substantial contribution to IFC’s shared corporate priorities. enabling outside investors to benefit from IFC’s expertise in achieving strong equity returns. Climate Change. Public-­private partnerships — ​Works to help governments design and implement public-­ private partnerships (PPPs) in infrastructure and other basic public services. and the Caribbean. invests third-­party capital and IFC capital. L.P. SME banking. or supply chain development in the agricultural sector. (Sub-­ Debt Capitalization Fund). the Africa Capitalization Fund. (Equity Capitalization Fund). Provides advice on business regulation and taxation. AMC.P. complementing the work of IBRD and the International Monetary Fund.5 billion under management: the IFC Capitalization (Equity) Fund. Latin American and Caribbean Fund. Catalyst funds). and the IFC Global Infrastructure Fund. a wholly-­owned subsidiary of IFC. and have grown to become an increasingly important tool for delivering on IFC’s mission. IFC’s Advisory Services are organized into four business lines: Access to finance — ​ Works with financial intermediaries to expand access to financial services. . 2013. Provides advice on small and medium enterprises (SMEs) and micro/retail finance solutions. with $5. sound environmental. as well as positive development impact in the countries in which it invests in developing and frontier markets. helps strengthen systemically important banks in emerging markets. social and governance practices and technologies that create a competitive edge. corporate governance. AMC managed seven funds. national pension funds. The ALAC Fund was established in FY10. Sustainable business — W ​ orks with companies and their supply chains to promote adoption of. Provides advice on preparing and structuring of PPP mandates. energy efficiency financing. as well as enabling financial infrastructure. LP (Global Infrastructure Fund). L. the IFC Capitalization (Subordinated Debt) Fund. Around half of IFC’s advisory projects work with government clients to help unlock investment opportunities for IFC and others — a ​ s is the case when IFC assists governments to improve the investment climate or to design and implement PPPs. The Africa Capitalization Fund was established in FY10 to capitalize systemically important commercial banking institutions in northern and Sub-­ Saharan Africa. LP (Russian Bank Cap Fund). (Africa Capitalization Fund). Ltd. At June 30. established in the year ended June  30. 2009 (FY09). Investment Services and Advisory Services may be offered either in tandem or sequentially. Advisory Services have continuously strengthened their alignment and deepened their synergies with investment operations. commercial banks in Russia that are either: (i) privately owned and controlled. the IFC Russian Bank Capitalization Fund.and resource efficiency-­ focused private equity funds in emerging markets. The ALAC Fund invests in equity investments across a range of sectors in Sub-­ Saharan Africa. LP and the IFC Catalyst Fund (UK). The Catalyst Funds were established in FY13 to make investments in selected climate. the IFC Catalyst Fund. while strengthening the capacity and know-­how of private sector clients — ​thereby extending IFC’s reach into challenging markets. SMEs. The other half of advisory projects involves work with private sector clients to build capacity or demonstrate the business case for desirable business practices. AMC helps IFC mobilize additional capital resources for investment in productive private enterprise in developing countries. The Global Infrastructure Fund was established in FY13 to focus on making equity and equity-­related investments in the infrastructure sector in global emerging markets. The Global Capitalization Fund. and catalyze investment in. particularly with regards to Fragile & Conflict Situations. Investment climate — ​ Works with governments to create an enabling environment to increase the role of private sector growth and development. or (iii) controlled and on a clear path to privatization. Advisory Services are often IFC’s first offering in new or challenging markets.6_ IFC Financials anD ProJecTs 2013 AdVISORY SERVICES ASSET MANAGEmENT COmPANY Advisory Services are recognized as a key part of the Corporation’s mandate. Examples include microfinance. or (ii) state-­owned. Agribusiness and Infrastructure. with gender as a cross-­ cutting priority. Latin America. Advisory Services play a crucial role in helping government clients create an effective enabling environment for private investment. LP (ALAC Fund). the IFC African. The Equity Capitalization Fund and the Sub-­Debt Capitalization Fund are collectively referred to as the Global Capitalization Fund. The Russian Bank Cap Fund was established in FY12 to invest in mid-­ sized. Investors in funds managed by AMC include sovereign wealth funds. investment policies. LP (collectively.

504 0.477 482 138 6. compared with $20.668 2. 2012). comprising the disbursed loan portfolio of $22.349 $ 15.549 million of equity investments ($1. FY13 and FY12 commitments and Core Mobilization comprised the following (US$ millions): FY13 Total commitments1 IFC commitments Loans Equity investments Guarantees: Global Trade Finance Program Other Client risk management Total IFC commitments Core Mobilization Loan participations.504 million ($4. IFC’s disbursed investment portfolio is diversified by industry sector and geographic region with a focus on strategic high development impact sectors such as financial markets and infrastructure. $ 3. (iv) disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets.ManagemenT’s Discussion anD Analysis _7 INVESTmENT PROGRAm Commitments Disbursements In FY13.358 $ 18. net and other.578 $ 3.651 million in FY12). The carrying value of IFC’s investment portfolio comprises: (i) the disbursed investment portfolio.209  million ($7.35 $ 4. and other mobilization Loan participations Parallel loans Other mobilization Total loan participations.070 million ($2. Disbursed investment portfolio FY12 $ 20. parallel loans and other mobilization AMC Equity Capitalization Fund Sub-­ debt Capitalization Fund ALAC Fund Africa Capitalization Fund Russian Bank Cap Fund Total AMC Other initiatives Global Trade Liquidity Program and Critical Commodities Finance Program Public Private Partnership (PPP) Infrastructure Crisis Facility Debt & Asset Recovery Program Total other initiatives Total Core Mobilization Core Mobilization Ratio $ 1.896 million — F ​ Y12).358  million in FY12.096 942 110 10 $ $ 850 41 63 — 954 $ $ 214 209 210 92 43 768 $ $ 24 215 190 8 — 437 $ 1. (ii) reserves against losses on loans.158 $ 6.462 IFC’s total disbursed investment portfolio (a non-­ US GAAP performance measure) was $33. and the disbursed debt security portfolio of $2.004 398 110 $ 8. Debt security commitments are included in loans and equity investments based on their predominant characteristics. . (v) unrealized gains and losses on equity investments held by consolidated variable interest entities.885  million at June  30.520 2.282 $ 24.853 IFC disbursed $10. $2. 2012).505 $ 2.732 $ 6.700 million at June 30. an increase of 22%. including $42 million attributable to noncontrolling interest ($0 in FY12). (iii) unamortized deferred loan origination fees.810 million in FY12).043  million at June  30. 2012). (vi) unrealized gains and losses on investments accounted for at fair value as available-­for-sale.012  million for its own account in FY13 ($7.462 million — ​F Y12) and Core Mobilization totaled $6.829 1.32 1. the disbursed equity portfolio of $9. of which IFC commitments totaled $18. and $523 million of debt securities ($520 million in FY12). parallel loans. and (vii) unrealized gains and losses on investments.981 million in FY12): $6.269 480 $ 1.349 million ($15.110 million at June 30.896 0. 2012).940 million of loans ($5.764 927 814 6.853 million. total commitments were $24.547  million at June  30. 2013 ($30.606  million ($21.

Apparel and Leather Other Percentage   FY12     FY13 0 5 10 15 20 25 30 35 40 . 2013.8_ IFC Financials anD ProJecTs 2013 The following charts show the distribution of the disbursed investment portfolio by geographical region and industry sector as of June 30. Gas. and June 30. and Mining Transportation and Warehousing Latin America and Caribbean Latin America and Caribbean Agriculture and Forestry Middle East and North Africa Sub-Saharan Africa Other Middle East and North Africa Sub-Saharan Africa Other Chemicals Information Nonmetallic Mineral Product Manufacturing Industrial and Consumer Products Food and Beverages Health Care Utilities Construction and Real Estate Wholesale and Retail Trade Primary Metals Accommodation and Tourism Services Education Services Pulp and Paper Textiles. 2012: Distribution by Region FY13 FY12 Electric Power Asia Europe and Central Asia Collective Investment Vehicles Distribution by Industry Sector Finance and Insurance Europe and Central Asia Asia Oil.

74% (74% at June 30. 2012). 2012). Indonesian rupiah. securitized debt obligations (e. as compared with $6. although some loans have been made for tenors as long as 20 years Currency — ​ primarily in major convertible currencies.547 million at June 30. 2. which are serviced by IFC at June 30. 2012) of IFC’s disbursed loan portfolio was US dollar-­ denominated. into US dollar variable rate assets.g. 2013 ($7. The carrying amount of IFC’s loan portfolio on IFC’s consolidated balance sheet (comprising the disbursed loan portfolio together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements) grew 7% to $20. compared with 25% at June  30. based on client demand and on IFC’s ability to economically hedge loans in these currencies through the use of mechanisms such as cross-­ currency swaps or forward contracts. 2013 and June 30. 2013. D. 2012).000 16.831 million at June 30. IFC typically offers local currency products in other currencies where it can economically hedge the local currency loan cash flows back into US dollars using swap markets or where it can fund itself in local bond markets. can be found in Notes B.654 million at June 30. Fixed-­ rate loans and loans in currencies other than US dollars are normally economically hedged using currency and/or interest rate swaps. 2013 includes $2. and other collateralized debt obligations) and preferred shares that are mandatorily redeemable by the issuer or puttable to the issuer by IFC. and Zambian kwacha. At June 30. 2012. principally US dollar. asset-­ backed securities (ABS). IFC’s disbursed loan portfolio at June 30.000 12. 2012).621 million. together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements). Additional information on IFC’s investment portfolio as of and for the years ended June 30. 2012). Paraguayan guarani. IFC’s disbursed loan portfolio totaled $22. The fair value of IFC’s equity portfolio2 was $14. Including “equity-­ like” securities classified as debt securities in IFC’s consolidated balance sheet and equity-­ related options.606 million at June 30. Loans comprise 67% of the disbursed investment portfolio as of June  30.695  million at June  30. 2012. E. 2013 ($12. Loans traditionally have been denominated in the currencies of major industrial nations. Mexican peso. 2013.000 Equity investments IFC’s equity investments are typically in the form of common or preferred stock which is not mandatorily redeemable by the issuer or puttable to the issuer by IFC and are usually denominated in the currency of the country in which the investment is made.985 million at June 30. H and I to IFC’s FY13 Consolidated Financial Statements. an increase of 22%. G. totaled $6. Loans The currency position of the disbursed loan portfolio at June 30. mortgage-­ backed securities (MBS).000 6. 2013 ($19. Rwandan franc. F. 2012) and 60% of the carrying amount of the investment portfolio as of June  30. IFC has also made loans in a number of frontier market currencies such as Tunisian dinar. Colombian pesos.633 million of currency products denominated in Indian rupee. Chinese renminbi. 2012 is shown below: Currencies US dollars Euro Chinese renminbi Loans generally have the following characteristics: Term — t ​ ypically amortizing with final maturities generally for seven to twelve years. Debt Securities Debt securities are typically in the form of bonds and notes issued in bearer or registered form. Indian rupees Mexican pesos Philippine pesos Brazilian reais South African rand Russian rubles Indonesian rupiah Colombian pesos Turkish lira Other 0   FY12     FY13 2. 2013 ($9.209  million at June 30.000 14. Philippine pesos. Equity investments accounted for 27% of IFC’s disbursed investment portfolio at June  30. 2013 (31% at June 30. Euro. Turkish lira and Vietnamese dong ($2. 2013 (62% at June 30.463 million at June 30. 2013. but IFC has a growing portfolio of local currency products. 2013. 2012).000 10. 2012).ManagemenT’s Discussion anD Analysis _9 Disbursed Loan Participations The portfolio of disbursed and outstanding loan participations. 2012 and 34% of the carrying amount of the investment portfolio at June 30.314 million at June 30.000 4. Russian ruble. The carrying amount of IFC’s equity investment portfolio (comprising the disbursed equity portfolio.496 million at June 30.000 8. and June 30. South African rand. grew 20% to $11. 2012). IFC’s disbursed equity portfolio totaled $9. 2013 ($21. and to a lesser extent. .774  million at June 30.043 million at June 30. 2013 (68% at June  30. Brazilian reais. but with a growing local currency loan portfolio Interest rate — ​ t ypically variable (or fixed and swapped into variable) Pricing — ​ reflects such factors as market conditions and country and project risks IFC’s loans traditionally have been made in major currencies.

therefore.764 million in FY12). Through the loan participation program. partial credit guarantees.151  million at June  30. 2012). parallel loans. IFC acts as the lender of record and is responsible for the administration of the entire loan. IFC mobilizes such private sector finance from other entities through loan participations. of the cost of any project. IFC intermediates between its developing country clients and derivatives market makers in order to provide IFC’s clients with full market access to risk management products.477 million ($6. thereby sharing the risk alongside its loan participants. in FY13 were $1. The carrying amount of IFC’s debt securities portfolio (comprising the disbursed debt securities portfolio. including the loan participation. Guarantee fees are consistent with IFC’s loan pricing policies. FY13 commitments include $482 million of guarantees ($398 million — ​F Y12). Client Risk Management Products The principal direct means by which IFC mobilizes private sector finance is through the sale of participations in its loans. In FY09. each with a formally approved Core Mobilization component. Guarantees GLOBAL TRADE FINANCE PROGRAM raising resources. 2012). currency or commodity price exposures. but when a guarantee is called. 2013 ($2. Loan participation commitments were $1. 2013 (7% at June 30. the client will generally be obligated to reimburse IFC in US dollar terms. and risk sharing facilities. other mobilization Other case-­ by-case mobilization decisions totaled $480 million in FY13 ($814 million in FY12). local government or other government entity.10 _ IFC Financials anD ProJecTs 2013 IFC’s disbursed debt securities portfolio totaled $2. require other financial partners. but for which IFC is not the lender of record. IFC expanded the Core Mobilization definition to account for third party financing made available for PPP projects due to IFC’s mandated lead advisor role to national.004 million — F ​ Y12) relating to GTFP. IFC has worked primarily with commercial banks but also with nonbank financial institutions in financing projects since the early 1960s. IFC finances only a portion. usually not more than 25%. and revised its mobilization resources definition accordingly to include these in the measure. IFC will always make a loan for its own account. loan sales. IFC charges fees to the borrower at prevailing market rates to cover the cost of the loan participation.269 million ($927 million in FY12). 2012). The components of Core Mobilization are as follows: LOAN PARTICIPATIONS FY13 commitments include $6.070 million at June 30.829  million in FY13 ($1. In FY12. FY13 commitments included $138 million of such products ($110 million — F ​ Y12). All IFC-­financed projects. Core Mobilization Loans from other financial institutions that IFC helped arrange for clients and received a fee. Whenever it participates a loan. Core Mobilization is financing from entities other than IFC that becomes available to clients due to IFC’s direct involvement in . 2013 ($2. 2012) and 6% of the carrying amount of the investment portfolio at June 30. together with adjustments as detailed in Note D to IFC’s FY13 Consolidated Financial Statements). Debt securities accounted for 6% of IFC’s disbursed investment portfolio at June 30. 2013 (7% at June 30. GUARANTEES AND PARTIAL CREDIT GUARANTEES IFC offers partial credit guarantees to clients covering. IFC launched AMC and a number of other initiatives. IFC will provide local currency guarantees. client obligations on bonds and/or loans.110 million at June 30. IFC’s guarantee is available for debt instruments and trade obligations of clients and covers commercial as well as noncommercial risks. PARALLEL LOANS IFC provides derivative products to its clients to allow them to hedge their interest rate. securitizations. on a risk-­ sharing basis.168 million at June 30. was $2.

2013 Fund Commitments to Investees: From IFC From other investors Disbursements from investors to Fund: From IFC From other investors Disbursements made by Fund Disbursements made by Fund (number) 336 217 546 7 33 63 — 94 91 4 38 46 78 2 1 2 1 3 — — 472 837 1. other mobilization. 2013 From IFC From other investors For the year ended June 30. PPP Mobilization FY13 resources mobilized includes $942  million relating to PPP Mobilization. It also includes advisory services to help governments design or redesign public-­ private-partnership projects.000 $ 182 $ 275 $ — $ — — — $ 4 .725 $ 1 .325 3.to medium-­ term financing for infrastructure projects.725 $ 1 .096 million ($850 million — F ​ Y12) relating to GTLP and CCFP.132 48 — 8 — — — — — — 116 190 437 52 — 14 11 3 — — — — — — — — — — — — 142 208 174 8 448 490 19 208 2 OTHER INITIATIVES Core Mobilization Ratio GTLP and CCFP IFC’s FY13 Core Mobilization included $1.500 200 800 — 182 125 150 — — 1. The Core Mobilization ratio is defined as: Loan participations + parallel loans + sales of loans and other mobilization + non-­ IFC investment part of structured finance which meets core mobilization criteria + non-­ IFC commitments in Initiatives + non-­ IFC investments committed in funds managed by AMC + PPP Mobilization Commitments (IFC investments + IFC portion of structured finance + IFC commitments in new Initiatives + IFC investments committed in funds managed by AMC) For each dollar that IFC committed.000 $ 182 $ 550 $ 282 $ 500 $ 5. parallel loans.ManagemenT’s Discussion anD Analysis _ 11 AMC The activities of the funds managed by AMC at June 30. 2012 can be summarized as follows (US$ millions unless otherwise indicated): Equity Sub-­Debt Capitalization Capitalization Fund Fund Assets under management as of June 30. Infrastructure Crisis Facility The infrastructure crisis facility is a facility that includes debt and equity components and provides short. the non-­ IFC portion of structured finance and the non-­ IFC commitments in Initiatives. IFC mobilized (in the form of loan participations.35 in FY13 ($0. FY13 Core Mobilization includes $110 million relating to the Infrastructure Crisis Facility ($63 million — ​ F Y12). which is the non-­ IFC. 2012 Fund Commitments to Investees: From IFC From other investors Disbursements from investors to Fund: From IFC From other investors Disbursements made by Fund Disbursements made by Fund (number) 62 40 97 6 28 186 36 24 32 215 Africa Capitalization ALAC Fund Fund Russian Bank Cap Fund Global Catalyst Infrastructure Funds Fund Total $ 1.275 $ 1. 2013 and June 30.275 $ 1. .514 775 500 225 1. 2012 From IFC From other investors For the year ended June 30. non-­ government portion of financing made available for PPP projects due to IFC’s mandated lead advisor role to national/local government or other government entity ($41 million — ​F Y12).457 775 500 225 1.261 30 332 214 31 52 210 — 92 35 43 — — — — 450 768 Africa Capitalization ALAC Fund Fund Russian Bank Cap Fund Global Catalyst Infrastructure Funds Fund Total $ 1. and the non-­ IFC investments committed in funds managed by AMC) $0.889 209 223 249 5 252 297 12 — — Equity Sub-­Debt Capitalization Capitalization Fund Fund Assets under management as of June 30.625 3.32 in FY12).500 200 800 — 182 250 300 75 207 100 400 1.

IFC invested part of the proceeds of a Nigeria naira borrowing in the P7 portfolio.9) $0. as compared to $894 million as of June 30. including futures and options.2 ($30. 16%). ABS. including IDA. government agencies and instrumentalities. followed by East Asia and the Pacific ($39 million. Mexican pesos and Brazilian reais P4 Same as for P2 P6 Local interbank rate indices Total $31.5 ($21. and.12 _ IFC Financials anD ProJecTs 2013 ADVISORY SERVICES The IFC Advisory Services Portfolio as of June  30. and other unconditional obligations of banks and financial institutions. time deposits. IFC 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. 2013 totaled $1.037 million. 17%).5) $22. a subcommittee of IFC’s Management Team.9) Comprising Proceeds from discount note program and cash inflows from investment operations Proceeds from market borrowings invested pending disbursement of operational loans Managed by IFC’s Treasury Department IFC’s Treasury Department Invested In Money market instruments Benchmark Overnight US dollar London Interbank Bid Rate (LIBID) Custom-­ created index of a series of six. the Advisory Services program in IDA countries grew by 17% to $142 million. In FY13. multilateral organizations. All seven portfolios are accounted for as trading portfolios. 24%) and Public Private Partnerships ($39 million. 25%). 28% of the total Advisory Services program. IFC’s liquid assets portfolio is summarized as follows: Portfolio P0 Fair Value ($ Billions)* $1. The largest regional advisory program in FY13 was in Sub Saharan Africa ($65 million).9 ($0. 2013 (June 30. 17%). Diversification in multiple dimensions ensures a favorable risk return profile. these include ABS and MBS. 2013. South Asia ($34 million. up from 88% in FY12. The P7 portfolio was $31 million at June 30. 14%) and others regions ($58 million. Likewise. principally currency and interest rate swaps and financial futures. 27%). Program results continue to show a positive trend. up from 72% in FY12. . and takes positions in various industry sectors and countries.8 ($0. up from $197 million in FY12. Development effectiveness ratings of the projects reached a record 76% success rate in FY13.8) $0. IFC utilizes derivative instruments. 2012) ** The net duration of the P1 and P3 benchmarks is approximately 0.25 years. Russian rubles. and other sovereign and agency issues P3 $0. IFC’s liquid assets are invested in seven separate portfolios. In FY13 the Advisory Services program grew in each of these areas. Europe and Central Asia ($36 million. LIQUID ASSETS IFC invests its liquid assets portfolio in highly rated fixed and floating rate instruments issued by. P6 and P7. bank deposits.9 ($0.7) External managers appointed by IFC External managers appointed by IFC IFC’s Treasury Department Global government bonds and other high quality corporate bonds as well as mortgage-­ backed securities Global government bonds. All liquid assets are managed according to an investment authority approved by the Board of Directors and liquid asset investment guidelines approved by IFC’s Corporate Risk Committee. fragile situations and climate change. or 65% of the total Advisory Services program. client satisfaction reached a record of 90%. with continued focus on strategic priority areas. or unconditionally guaranteed by.7 ($0. internally named P0 through P4. Program focus by business line shows that the largest program was in Investment Climate ($75  million. ABS. Turkish lira. and high quality corporate issuers. comprising. 2012. and other high quality corporate bonds as well as mortgage-­ backed securities Short-­ term money market instruments denominated in South African rand. followed by Access to Finance ($63 million. contained the after-­ swap proceeds from variable-­ rate borrowings denominated and invested in Euros. Polish zloty. 32%). The Advisory Services program with clients grew to $232 million in FY13. IFC manages the market risk associated with these investments through a variety of hedging techniques including derivatives. III. and high quality corporate bonds generally swapped into 3-month US dollar LIBOR P2 $4. Engagements in climate change increased almost 80% to $53 million (24% of the total Advisory Services program). The P7 portfolio was created in FY10. prior to FY13. In implementing these portfolio management strategies.4 ($5.6) Primarily IFC’s paid-­ in capital and accumulated earnings that have not been invested in equity and quasi-­ equity investments An outsourced portion of the P1 portfolio An outsourced portion of the P2 portfolio The proceeds of liquidity raised in local currency prior to disbursement IFC’s Treasury Department US Treasuries.4) * at June 30. governments. In FY13. The program in Fragile and Conflict Situations grew by 18% to $39 million (18% of the total Advisory Services program).9 years. equally weighted 6-month LIBID deposits that mature on the 15th of each month  — ​ average life of 3 months** Lehman Brothers US 1–3 year maturity Treasury Index*** Same as for P1 P1 Principally global government bonds. Sustainable Business ($55 million. *** The net duration of the P2 and P4 benchmark is 1.

ManagemenT’s Discussion anD Analysis _ 13 IV. to $2. During FY13. Dominican pesos. Prior to FY13.58 billion. IFC had a short term US$ discount note program to provide an additional funding and liquidity management tool for IFC in support of certain of IFC’s trade finance and supply chain initiatives. with a weighted average remaining contractual maturity of 4. 2012). together with the member in whose currency the borrowing is denominated. IFC had gross payables from borrowing-­ related currency swaps of $18. respectively. After the effect of these derivative instruments is taken into consideration.37 billion at June 30.37 billion at June 30.8 billion ($35. capital and retained earnings) as of June  30.28  billion.9 billion in FY12 and $10.70 billion at June 30. CAPITAL AND RETAINED EARNINGS BORROWINGS The major source of IFC’s borrowings is the international capital markets. Beginning in FY13. 2013. IFC borrowed (after the effect of borrowing-­ related derivatives) $12. 2013.1 years at June 30. the Board of Directors recommended that the Board of Governors approve an increase in the authorized share capital of IFC of $130  million. The discount note program provides for issuances with maturities ranging from overnight to one year. Chinese renminbi. At June 30. 2012) and from borrowing-­ related interest rate swaps in the notional principal payable amount of $37. $18.71 billion of retained earnings ($17. Noncontrolling interests totaled $0. IFC launched a short term CNY discount note program to complement the US$ program and to expand the availability of short-­ term local currency finance for private enterprises in CNY. Selective Capital Increase (SCI) On July  20. $0. Market borrowings are generally swapped into floating-­ rate obligations denominated in US dollars.3 billion at June 30. The subscription period will end on June 27.40  billion was subscribed and paid in at June 30. 2012) were outstanding under the US$ and CNY short-­ term discount note programs. 2012.58  billion — ​ June  30. francs.2 billion at June 30. The resolution recommended by the Board of Directors was adopted by the Board of Governors on March 9. 2013. denominated in C.7% at June 30. IFC diversifies its borrowings by currency. and through the issuance of $200  million of shares (including $70  million of unallocated shares). 2012). 2012). Outstanding market borrowings have remaining maturities ranging from less than one year to approximately 30 years. 2012. and Russian rubles.4 billion — J ​ une 30 2012). 2013.580  million.05  billion at June  30. 2013 and June  30. Actual maturities may differ from contractual maturities due to the existence of call features in certain of IFC’s borrowings. 2012). As of the same date. The Board of Directors also recommended that the Board of Governors approve an increase in Basic Votes aimed at enhancing the voice and participation of developing and transition countries (DTCs) and requiring an amendment to IFC’s Articles of Agreement. As of June 30. source.40 billion of paid-­ in capital. onlent to clients and/or partially swapped into US dollars. total capital comprised $2.58  billion ($2.4% at June 30. country. 2013 ($0 — ​June 30.F.6 billion in FY12 and $0.4 billion of outstanding debt ($0. The weighted average cost of market borrowings after currency and interest rate swap transactions was 0. Nigerian naira. 2013 ($2. and maturity to provide flexibility and cost-­ effectiveness. The amendment to the Articles of Agreement and the increase in the authorized share capital have become effective on June 27. the Board of Directors has authorized the repurchase and/or redemption of debt obligations issued by IFC. up from the June 30. 2012. IFC also has a developmental role in helping open up new domestic markets to foreign issuers in its member countries. During the year ended FY13. 2013 were variable rate US dollar-­denominated (99% — ​June 30.3 billion in FY11). which enhances the liquidity of IFC’s borrowings.12 billion of accumulated other comprehensive income ($0. 2013 (0.A. 2012). 2013. 99% of IFC’s market borrowings at June  30.and $0.51 billion at June 30. IFC’s authorized capital was $2. Proceeds of such borrowings were invested in such local currencies. 2012 level of $20. Under the Articles of Agreement. IFC’s total capital as reported in IFC’s consolidated balance sheet amounted to $22.1 billion ($1. generating gains on buybacks of $11 million in FY13 ($19 million — ​ FY12 and $10 million — ​ F Y11). 2012). of which $2. 2010.2 billion ($0 — ​ June 30. 2012 are as follows: FY13 FY12 Borrowings from market sources Borrowings from market sources Retained earnings Paid-in capital Discount Note Program Borrowings from IBRD Retained earnings Paid-in capital Discount Note Program Borrowings from IBRD IFC’s mandate to help develop domestic capital markets can result in raising local currency funds. 2014 and payment of subscribed shares must occur no later than June 27. 2013. As of June  30. 2012). In FY13 IFC borrowed in fourteen currencies and in final maturities ranging from one to 30 years. As of June  30. eligible members have been authorized to subscribe to their allocated IFC shares. and $1.7 billion ($18. $1. 2013 (5. 2012). . IFC received $31 million of capital subscriptions related to the SCI.8 billion during FY13 ($11. At June 30. IFC repurchased and retired $0.3  billion in FY11). 2012).5 years at June 30. In addition. IFC may borrow in the public markets of a member country only with approvals from that member. 2015.5 billion of such non-­ US$-denominated market borrowings were outstanding. As of June 30. FUNDING RESOURCES IFC’s funding resources (comprising borrowings. up from $2.

subsequently. The levels and purposes of retained earnings designations are set based on the Board of Directors-­ approved principles. the Audit Committee. »»Risk appetite is defined and implemented in the form of exposure limits. 2013 when compared to June 30. in FY14. »»Ensuring business decisions are based on an understanding of risks. the Executive Vice President/CEO and the Management Team. and have the effect of reducing retained earnings designated for this specific purpose.3% at June 30. At the highest level. IFC assumes various risks of various types. and $34 million at June 30. the Global Infrastructure Project Development Fund (FY08). This framework is defined in terms of several interrelated dimensions: »»IFC’s guiding principles provide the foundation for active management of risk in IFC’s business. 2011). and expenses reported in net income related to prior year designations. 2006 (FY06)). 2005). 2011). the Corporate Risk Committee. together with independent institutional oversight bodies. 2012. 2011). Key to maintaining IFC’s reputation is the . 2013. RISK PROFILE 3. V. the maximum amount available for designation was $251 million. $31 million of retained earnings designated for PBG ($41 million at June 30. $199 million of retained earnings designated for advisory services ($219 million at June 30. compared to $82 million in FY12. ENTERPRISE RISK MANAGEMENT In executing its sustainable private sector development business. for performance-­ based grants (PBG) (year ended June  30. Financial soundness is impacted by. 2013. 2012.4% at June 30. IFC liaises with the corresponding Risk Management areas across the group on a regular basis. 2012 to 8. Active management of these risks is critical to IFC’s ability to maintain financial sustainability and achieve development impact. the Board of Directors approved a The key principles which guide IFC’s integrated risk management framework are: »»The effective balancing of development impact. Deployable Strategic Capital IFC’s deployable strategic capital decreased from 9. and »»Shared responsibility for risk management across the Corporation. »»Risk governance is provided by a sub-­ committee of the Management Team. 2013. and $217 million at June 30. on a principles-­ based Board of Directors-­ approved financial distribution policy. 2013. Expenditures for the various approved designations are recorded as expenses in IFC’s consolidated income statement in the year in which they occur. and $30 million at June 30. among other things. Amounts available to be designated are determined based on a Board of Directors-­approved income-­based formula and. IFC’s cost of funding and the liquidity of the liquid asset portfolios. IFC recognized expenditures against grants to IDA of $340  million on signing of a grant agreement between IDA and IFC concerning the transfer to IDA and use of funds corresponding to the aforementioned paragraph.032 million at June 30. IFC began a process of designating retained earnings to increase its support of advisory services and. analyzed and controlled. measured. monitors compliance with prescribed limits. FY12 Designations designation of $251 million of IFC’s retained earnings for grants to IDA. policies and procedures. 2011). »»As a member of the World Bank Group. »»Being extremely selective in undertaking activities which may result in adverse reputational impact. policies and procedures. and thereby concluded.373 million at June 30. 2012. IFC recognizes designations of retained earnings for advisory services when the Board of Directors approves it and recognizes designation of retained earnings for grants to IDA when it is noted with approval by the Board of Governors. 2012. 2011). $20 million of retained earnings designated for the Global Infrastructure Project Development Fund ($30  million at June 30. risk and reward. Based on the Board-­ approved distribution policy. monitored. This decrease represents the effects of increases in investment commitments and disbursements partially offset by realized gains in FY13 and the reduction in the net unfunded status of the pension plans as of June 30. This designation is expected to be noted with approval by the Board of Governors.435 million of undesignated retained earnings ($17. At June 30. and $28 million of retained earnings designated for IFC SME Ventures for IDA countries ($32 million at June 30. 2012. sets risk standards and receives regular reports on different aspects of risk management at the enterprise level. IFC has developed a comprehensive enterprise risk management framework within which risks are continually identified. On August 7. 2004. and $54 million at June 30. IFC’s risk management objectives are to maintain financial soundness and preserve its reputation. Income available for designations generally comprises net income excluding unrealized gains and losses on investments and unrealized gains and losses on other non-­ trading financial instruments. and are approved by the Board of Directors. The Risk Management and Portfolio Vice Presidency. 2012. 2012. On January 15. beginning in FY08. the Board of Governors noted with approval these designations. in its entirety. the level of deployable strategic capital. On October 12. 2012.060  million. the Board of Directors approved the designation of $340 million of IFC’s retained earnings for grants to IDA and a designation of $80 million of IFC’s retained earnings for advisory services. under the supervision of the Board of Directors. which are applied each year to assess IFC’s financial capacity and to determine the maximum levels of retained earnings designations. IFC recognized expenditures for advisory services and expenditures against other designated retained earnings totaling $124  million. and $16. KEY RISK MANAGEMENT PRINCIPLES On August 9. which reviews and approves all risk policies. retained earnings comprised $18. income from consolidated VIEs. grants to IDA (year ended June  30.14 _ IFC Financials anD ProJecTs 2013 Designations of Retained Earnings Beginning in the year ended June 30. and IFC SME Ventures for IDA Countries (FY08). FY13 Designations Income available for designations in FY13 (a non-­ GAAP measure)3 totaled $1.

and »»IFC’s sanctions procedures. IFC recognizes that adverse reputational. »»Guiding principles for IFC’s operations (catalytic role. and (ii) the application of mitigation measures specifically tailored to the circumstances pertaining to the identified conflicts. »»Designed enhancements to IFC’s Integrity Due Diligence process to increase consistency. »»Created a working group. and the environmental and social effects of the projects with which IFC is associated. communication activities related to reputational impact were managed by the Corporate Relations Department. The Independent Evaluation Group assesses the alignment between projected and realized outcomes while the Compliance Advisor/Ombudsman. IFC’s Management Team. IFC’s capacity to take risks is constrained primarily by its capital base. IFC monitors the implementation of its strategy through many processes. legal issues are overseen by the General Counsel Vice Presidency. In addition. The overall management of strategic risk is effected through the design. The Corporation regularly measures. »»Created a new Regional Chief Risk Officer role to serve IFC’s decentralized business model and provide senior risk oversight for the Sub-­ Saharan Africa region. social and corporate governance issues which arise out of IFC’s activities are overseen by the Business Advisory Services Vice Presidency. In FY13. under the direction of the Executive Vice President and CEO. In addition. This team is also responsible for external and internal communications. procedures and directives. RISK APPETITE public affairs and brand marketing and collaborates across the Corporation to help develop and implement effective communications strategies. Given the nature and scope of products and services that IFC provides its clients in furtherance of its development mandate. including oversight and management of existing and potential risks. Centralized risk management is provided by IFC’s Management Committees and Senior Management. which provides advice on strategic and crisis communications in order to manage potential and actual reputational impacts both at the corporate and project levels throughout the investment cycle. ensures that IFC remains accessible to its stakeholders. . (ii) cascaded objectives. the World Bank Group’s Internal Audit Vice Presidency monitors internal controls and governance while the Integrity Vice Presidency monitors integrity in operations and investigates allegations of fraud and corruption. »»Extended Risk and Control Self-­Assessment to all departments to support active management of operational risk. confirmation and implementation of an annual strategy for IFC. tasked with improving and formalizing the process and methodology for Corporation-­wide stress testing. is responsible for the Corporation’s day-­ today operations.” The key guiding principles and policies established as part of the framework for managing IFC’s strategic risks consist of: »»An ex-­ a nte assessment of strategic fit of each project. In order to properly manage operational or business conflicts. Reputational impact is of significant concern to IFC as negative perceptions of stakeholders and/or the general public may adversely impact IFC’s ability to carry out its business effectively. MANAGING FINANCIAL AND REPUTATIONAL IMPACT Highlights from significant changes made in FY13 are as follows: »»Updated the existing framework to include a more comprehensive approach to measuring economic capital for IFC’s Treasury activities. »»Benchmarked IFC against industry best practice in workouts and operational risk management. business partnership and additionality). financial. policies. monitors and evaluates its risk profile to ensure that both individual and aggregated risks remain within the ranges deemed acceptable by Senior Management. client-­relationship and other implications can arise if such conflicts are not carefully managed. the risk of not achieving IFC’s purpose of furthering economic development by “encouraging the growth of productive private enterprise in member countries” and its vision “that people should have the opportunity to escape poverty and improve their lives. STRATEGIC RISK The consequences of failing to manage risks optimally are financial loss and/or adverse impact to IFC’s reputation. Risk tolerance defines the amount of each risk type that IFC considers acceptable in the context of its business activities. (iii) and an integrated quarterly management report. and other consequences of a failure to achieve its strategic objectives. RISK GOVERNANCE The Board of Directors and Board Committees oversee the overall risk tolerance for the Corporation and provide the highest level of oversight. the Independent Evaluation Group conducts ex-­ post evaluations of the implementation of IFC’s strategy on an ongoing basis. »»Environment and social policies. and in particular. better manage accountability and augment decision-­ making efficiency. including: (i) corporate and department scorecards. The Risk Management and Portfolio Vice Presidency is responsible for managing IFC’s financial and operational risks.ManagemenT’s Discussion anD Analysis _ 15 Corporation’s ability to continually adapt to an evolving external business environment. The strategy is developed by Senior Management and approved by the Board of Directors. IFC defines strategic risk as the potential reputation. There is common and shared accountability for strategic and stakeholder risk management at the IFC Management Team level. Project-­ specific environmental. IFC has implemented processes directed at (i) the identification of such conflicts as and when they arise. FY13 Enterprise Risk Highlights IFC’s risk appetite defines the types of risk which IFC is willing to assume in the pursuit of its business objectives. Risks are mitigated in practice by a variety of measures including close monitoring by risk management units and oversight by IFC’s Senior Management. IFC translates risk appetite and tolerance into limits. operational or business conflicts of interest can arise in the normal course of its activities. the integrity and corporate governance of its business partners and clients.

or other tangible development outcomes that IFC projects are expected to deliver during their lifetime. the World Bank Group concluded an agreement with other multilateral development banks (MDBs) whereby entities debarred by one MDB may be sanctioned for the same misconduct by the other participating development banks. financial risk management at IFC begins with an articulation of the Corporation’s risk appetite as defined by the types of risk that the Corporation is willing to take in the pursuit of its strategic objectives. Following from this articulation is an enterprise risk management framework that encompasses strategy. including due diligence and commitment to good corporate governance. »»Loans are funded with liabilities that have similar characteristics in terms of interest rate basis and currency and. IFC established a set of procedures to sanction parties involved in IFC projects committing corrupt. duration except for the Board of Directors-­ approved new products involving asset-­ liability mismatches. The Sustainability Framework comprises IFC’s Policy and Performance Standards on Environmental and Social Sustainability and IFC’s Access to Information Policy: »»The Policy on Environmental and Social Sustainability describes IFC’s commitments. total loss reserves and retained earnings. Further. (ii) 30% of committed guarantees. IFC uses the Sustainability Framework along with other strategies. collusive. »»The Performance Standards are intended to help guide clients on sustainable business practices a part of which involves continually identifying and managing risks through stakeholder engagements and client disclosure obligations in relation to project-­level activities. The enhanced emphasis on combating fraud and corruption does not change the high expectations IFC has always held for its staff. fraudulent. investing its funds under the discipline of the marketplace. Excess capital that is not deployed has limited financial and no development impact. operational failure or other reasons. IFC’s risk appetite. sanctions procedures Financial risk management is about taking calculated risks that are aligned with the Corporation’s overall risk appetite and within the boundaries of established tolerances. To align risk tolerance with this definition. IFC takes the same commercial risks as do private institutions. clients and projects. lack of liquidity. capital planning. Business partnership: IFC functions as a business in partnership with the private sector. In April 2010. Guiding Principles for IFC’s Operations FINANCIAL RISK Catalytic role: IFC will seek above all to be a catalyst in facilitating productive investments in the private sector of its developing member countries. An important consideration when setting IFC’s risk appetite is the need to use capital efficiently by recognizing the inherent trade-­ offs involved with maintaining reserve capital. »»IFC’s Access to Information Policy reflects the Corporation’s commitment to transparency and good governance and outlines institutional disclosure obligations.and off-­balance sheet exposures estimated at levels consistent with the maintenance of a AAA rating. for fixed rate loans. procedures and directives that help guide the management of IFC’s financial risk within acceptable tolerance bands. In FY12. and (iii) 30% of committed client risk management products. consisting of proceeds from external funding. policies. securities or other assets will not fulfill their obligations. net of designations) equal to total potential losses for all on. IFC defines credit risk as the risk that third parties that owe IFC money. coercive or obstructive practices. they moved into implementation and are fully integrated into IFC’s corporate scorecard and incentives for management. which have been approved by its Board of Directors: »»Minimum liquidity (liquid assets plus undrawn borrowing commitments from IBRD) must be sufficient at all times to cover at least 45% of IFC’s estimated net cash requirements for the next three years. processes are in effect which translate IFC’s risk appetite into limits. »»IFC is required to maintain a minimum level of total resources (including paid-­ in capital. as it pertains to financial risk. policies and initiatives to focus business activities on achieving the Corporation’s development objectives. Thus. IDG 2 (Health and Education) and IDG 3 (Financial Services). These parties may default on their obligations to IFC due to bankruptcy. was completed and in FY13. procedures and tools for managing credit risk. All project teams are required to record expectations of development outcomes with time-­bound targets using standard indicators. Credit risk management consists of policies. IFC uses its economic capital framework to measure the capital required to maintain its AAA rating. at the same time. These indicators are tracked and performance is rated on an annual basis for the entire duration of every project. primarily in IFC’s loan portfolio.16 _ IFC Financials anD ProJecTs 2013 IFC’s Sustainability Framework articulates the Corporation’s strategic commitment to sustainable development and is an integral component of IFC’s approach to risk management. As such. access. FY13 Strategic Risk Highlights IFC operates under a number of key financial policies and guidelines as detailed below. It does so by mobilizing financing from both foreign and domestic investors from the private and public sectors. keeping some capital in reserve allows IFC to maintain financial strength and respond proactively in the event of future crises. but also . CREdIT RISk IFC’s Development Goals (IDGs) are targets for reach. »»IFC maintains a minimum level of liquidity. target setting and risk monitoring and management. the testing phase for two such goals. has been defined by Senior Management and the Board of Directors as maintaining a AAA rating within a three-­ year time horizon. that covers at least 65% of the sum of: (i) 100% of committed but undisbursed straight senior loans. Additionality: IFC participates in an investment only when it can make a special contribution not offered or brought to the deal by other investors. Key Financial Policies and Guidelines In FY07. roles and responsibilities in relation to environmental and social sustainability.

is a key input into the risk tiering that determines authority levels required for transaction approval. Lower trigger levels are set for certain countries. The eligibility criteria and limits of Treasury counterparties are stipulated by the “Liquid Asset Investment Directives. There is a sublimit of $100  million for an individual currency under this limit. information obtained from the investment departments is analyzed and an independent review of the credit risk of the transaction undertaken. Responsibility for the day-­ to-day monitoring and management of credit risk in the portfolio rests with the individual investment departments. In addition to IFC’s traditional use of top-­ rated international banks as swap counterparties.” Specifically. »»IFC’s total exposure to a single obligor and groups of obligors may not exceed stipulated economic capital and nominal limits based on the riskiness of the obligor. Institution-­ specific limits are updated at least quarterly based on changes in the total size of IFC derivatives portfolio or as needed according to changes in counterparty’s fundamental situation or credit status. To help enable early involvement. work in close coordination with IFC’s Legal Department to provide rapid response. General counterparty eligibility criteria are set by the Board of Directors-­ approved Asset-­ Liability Management and Derivative Products Authorization and Liquid Asset Management General Investment Authorization. These risk parameters are used to determine risk based economic capital for capital adequacy. »»Lender of record exposure in a country may not exceed a specified percentage of a country’s total long-­ term external debt. IFC manages concentration risk through a number of operational and prudential limits. the quality of IFC’s investment portfolio is monitored according to principles and procedures defined in the Operational Policies and Procedures. Credit risk across IFC’s investment portfolio is monitored and managed through proactive identification of emerging risks and portfolio stress testing in focus sub-­ portfolios. and segment concentration. Treasury counterparty credit risk is managed to mitigate potential losses from the failure of a trading counterparty to fulfill its contractual obligations. . IFC provides focused attention on portfolio projects that require more sophisticated workout and restructuring. »»For exchange-­ t raded instruments. IFC has recently extended the universe of eligible swap counterparties to include central banks and select local banks. »»Because counterparties can be downgraded during the life of a given transaction. IFC signs collateral agreements with counterparties that require the posting of collateral when net mark-­to-market exposures exceed certain predetermined thresholds. IFC Counterparties are subject to conservative eligibility criteria and are predominantly restricted to banks and financial institutions with high quality credit ratings by leading international credit rating agencies. »»Exposures to individual counterparties are subject to concentration limits. After commitment. contracts and dealers. these are subject to annual review and approval by the Corporate Risk Committee. For derivative instruments. as early involvement is the key to recovery when projects get into difficulty. seasoned professionals from IFC’s Special Operations Department comprised of workout professionals with extensive experience in handling such projects. »»Total exposure to a country is based on the amount of economic capital required to support its investment portfolio in that country. credit policies and guidelines have been formulated covering treasury operations. Similarly. together with investment size and product type. The credit risk rating. For impaired loans and other investments at risk. at key steps during the investment approval process. IFC’s counterparties are currently restricted to banks and financial institutions with high quality credit ratings (with a mark-­to-market agreement) by leading international credit rating agencies. IFC limits credit risk by restricting transactions to a list of authorized exchanges. it includes portfolio management and risk modeling activities that provide an integrated view of credit risks and their drivers across the Corporation. including limitations on single project/client exposure. Credit risk also includes concentration risk: the risk of extreme credit losses due to concentration of credit exposure to a common risk factor. IFC has adopted the following key financial policies and guidelines that have been approved by the Corporate Risk Committee: Investment Operations »»IFC does not normally finance for its own account more than 25% of a project’s cost.ManagemenT’s Discussion anD Analysis _ 17 related to counterparty risk taken in the liquid asset and borrowing portfolios. rapid response is essential. 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 materialize. With respect to IFC’s credit risk exposure to clients in developing emerging markets. exposure is measured in terms of replacement cost for measuring total potential exposure. for the sole purpose of funding local currency loans. and by placing limits on the Corporation’s position in each contract. For derivatives. Exposure limits are set for each country based on the size of its economy and its risk score. Credit risk management spans investment origination to final repayment or sale. IFC also requires that low quality counterparties should not have more than 30% of total net-­ of-collateral exposures. loss given default and exposure at risk. single country exposure. The credit risk of loans is quantified in terms of the probability of default. »»To limit its exposure. Treasury Operations »»Counterparties are subject to conservative eligibility criteria. Sub-­ limits apply for certain sector exposures within a country. capital allocation and internal risk management purposes as well as for setting general loan loss reserves and limits. »»IFC’s committed exposure in guarantees that are subrogated in local currency is limited to $300 million for currencies for which there are no adequate currency and interest rate risk hedging instruments as determined by IFC’s Treasury Department at the time of commitment. including the assignment of a credit risk rating.

Additional strategies that are employed are as described below. Excluding “loan-­ like” debt securities. partially offset by the removal of one loan with principal outstanding of $45 million. which are intended to facilitate clients’ risk management. Treasury operations counterparties also remain well diversified by sector and geography.274 million at June 30. The factors taken into consideration by the Corporate Equity Committee include projected developmental impact. reflecting IFC’s roles as a development institution and long-­ term investor.0 2. The primary instruments for maintaining sufficient liquidity are IFC’s seven liquid asset portfolios: »»P0. Market risk resulting from derivative transactions with clients. sector diversification. as well as the fact that most of the Corporation’s equity investments are in private securities. which is an outsourced portion of the P1 portfolio (managed by external managers) »»P4. down from $21 million at June 30.570 million — ​ June 30.0   $ millions   IFC takes equity risk in its listed and unlisted equity investments in emerging markets. 2012.0 5. IFC’s country exposure considerations. an increase of $413 million (48%) from the June 30. as measured by aggregate risk ratings was substantially unchanged between June  30. macro-­ economic considerations. money market funds. Total reserves against losses on loans at June 30. 2013. was $17 million.0   Percentage of disbursed loans 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 a reserve for loss. 2012). The principal amount outstanding on non-­ performing loans totaled $1. at least at origination. (e) interest rate futures and swaps to manage currency risk in the portfolio.6% at June 30. which is an outsourced portion of the P2 portfolio (managed by external managers) »»P6. The five-­ year trend of non-­ performing loans is presented below: Non-performing Loans $ millions 0 200 400 600 800 1. (c)  high quality ABS rated by at least two rating agencies and/or other high quality notes issued by corporations. IFC holds collateral in the amount of $1. a subcommittee of the Management Team. 2012). one-­ month floater securities and repos. 2012). The market risk in the internally-­managed liquid asset portfolios is measured using a corporate value-­ at-risk model. Interest rate and currency exchange risk associated with fixed rate and/or non-­ US dollar lending is largely economically hedged via currency and interest rate swaps that convert cash flows into variable rate US dollar flows. 2012 level of $859 million. and is included in payables and other liabilities on IFC’s consolidated balance sheet. which is invested in short-­ term local currency money market instruments and local government securities 4. which are generally invested in: (a) high quality foreign sovereign.381  million at June  30. IFC does not recognize income on loans where collectability is in doubt or payments of interest or principal are past due more than 60 days unless collection of interest is expected in the near future. equity portfolio management and asset allocation. global trends in equity markets.1% at June 30. . as well as its duration relative to benchmark. 2012 and June 30. 2013.272 million at June 30. (b) US Treasury or agency instruments. IFC’s additionality and comparative advantages. sovereign-­ g uaranteed and supranational fixed income instruments. based on the year-­ end portfolio.2% of the disbursed loan portfolio (6. The reserve at June 30. country diversification. Liquid Asset Portfolios 1. interest rate exposure and credit spread exposure. reflecting its use for short-­ term funding requirements »»P1 and P2.000 1. which calculates daily value-­at-risk measurements.0 4. Investment Operations FY09 FY10 FY11 FY12 FY13 Percentage 0. Total reserves against losses on loans are equivalent to 7. is mitigated by entering into offsetting positions with highly rated market counterparties.200 IFC’s exposure to market risk is largely mitigated by the Corporation’s matched-­ f unding policy and by the use of derivative instruments to convert most of IFC’s assets that are funded from market borrowings and such market borrowings into floating rate US dollar assets and liabilities with similar duration. and (f) cash deposits and repos »»P3. 2013 ($3.628  million ($1. increased to $1. a key indicator of loan portfolio performance. fixed certificates of deposits.0 3. The amount of non-­ performing loans as a percentage of the disbursed loan portfolio4. In accordance with IFC’s key financial policies and guidelines noted above.0 6.6% — J ​ une 30. 2012). 2013 (4. and valuations. provides guidance on IFC’s overall strategy in equity investments. The increase in the amount of non-­ performing loans as a percentage of the disbursed loan portfolio was largely driven by the placing of seven loans with principal outstanding greater than $45  million for an aggregate amount of $423 million. 2013. There was a release of provision of $4  million on guarantees in the consolidated income statement in FY13 ($3 million release of provision — ​ F Y12). The Corporate Equity Committee. 2013. Treasury operations Counterparty credit risk in IFC’s Treasury operations is managed on a daily basis through strict eligibility criteria and accompanying limits. which is generally invested in short-­ dated deposits. was 5. Numerous factors are taken into consideration when making asset allocation decisions. (d) MBS.18 _ IFC Financials anD ProJecTs 2013 FY13 Credit Risk Highlights MARKET RISK Investment operations The quality of IFC’s loan portfolio.

(ii) US Treasury or agency instruments. These structures include borrowings payable in multiple currencies.ManagemenT’s Discussion anD Analysis _ 19 »»P7. sovereign-­ g uaranteed and supranational fixed income instruments. these assets will be available to generate funds that are needed to support IFC’s cash requirements. and the benchmark reflects the chosen risk profile for this un-­ invested capital (paid-­in capital and retained earnings). The P6 portfolio consists of foreign currency proceeds raised locally through swaps and other funding instruments to provide more flexible local currency loan products to clients. To this end. Market risk associated with fixed rate obligations and structured instruments entered into as part of IFC’s funding program is generally mitigated by using derivative instruments to convert them into variable rate US dollar obligations. the Corporation remained especially selective at entry and managed its equity investment portfolio pro-­ actively through close monitoring. accelerating the trend that started in late 2010. In the event of a liquidity crisis. the European Central Bank announced their. Consequently. Active portfolio management enabled the Corporation to revolve its funds significantly in FY13. and (iii) money market mutual funds. Interest rate. foreign exchange rates and commodity prices. a variety of derivative instruments are used. but the last seven weeks of FY13 virtually erased all gains from the first half of FY13. The P0. or one or more foreign exchange rates. prepayments. and spread risk are all carefully controlled on a daily basis using a system of limits that remained in compliance during FY13. IFC’s investments are predominantly illiquid in nature due to the lack of capital flows. in IFC’s reporting currency. The liquid asset portfolios benefitted from this improvement in the markets and remained fully invested in spread risk throughout the fiscal year. strict investment eligibility criteria for the Liquid Asset portfolios are defined in the Liquid Asset Management Investment Guidelines. or borrowings with principal and/or interest determined by reference to a specified index such as a reference interest rate. the US$. The primary source of interest rate risk in the liquid asset portfolios is the P2 and P4 portfolios. foreign exchange. interest rate and currency swaps.000. Equity valuations improved steadily during the first half of FY13. It should also be noted that emerging market equities lagged most developed equity markets in FY13. Outright Monetary Transactions (OMT) program aimed at equalizing borrowing costs for private borrowers across the European Union by providing support for short-­ dated sovereign government bonds. Risk premia receded across financial markets in response. consistent with the matched-­ funding policy. or rescheduling. which announced a much greater-­ t han-expected ease in monetary policy. to a greater degree. and maintain an acceptable level of profitability. The aggregate position in each lending currency is monitored on a daily basis and the risk is managed within a range of +/– $5  million equivalent in each currency. sometimes using complex structures. LIQUIDITY RISK While IFC’s matched-­ f unding policy provides a significant level of protection against currency and interest rate risk. IFC takes both long and short positions in securities in the management of these portfolios to their respective benchmarks. In response to such heightened volatility. In addition. P1 and P3 portfolios are managed to variable rate US dollar benchmarks. which consists of after-­swap proceeds from variable-­ rate borrowings denominated and invested in Euros and proceeds from fixed-­rate borrowings denominated and invested in Nigerian naira. P4 represents an outsourced portion of the P2 portfolio. Examples of these criteria include minimum sizes for bond issuances. . P2 represents the portion of IFC’s capital not disbursed as equity investments. as prospects of a less accommodative Federal Reserve and renewed concerns on global growth. the P1 and P3 portfolios also contain spread risk of high quality credit counterparties. including short-­ term. as most emerging market currencies appreciated moderately against the US$ in the first half of FY13. Shortly after the fiscal year began. which can become mismatched over time due to write-­ downs. which are managed to Barclay’s 1-3 year US Treasury Index benchmark. The Nigerian naira portion of the P7 portfolio is managed to the related IFC debenture issued in FY13. Asset-­Liability Management The overall level of market risk in IFC’s Treasury operations increased in FY13 due to increasing volatility of Sovereign interest rates near the end of FY13 yet Treasury market risk still remained low compared to other portfolios and risk types. The Euro portion of the P7 portfolio is managed to six equal-­ weighted EURIBID deposits maturing at the next six monthly reset dates of outstanding liabilities. and the lack of price transparency in many emerging markets. due to large fluctuations in global equity markets. The residual interest rate risk is managed by measuring the sensitivity of the present value of assets and liabilities in each currency to a one basis point change in interest rates and managed on a daily basis within a range of +/– $50. Residual currency risk arises from events such as changes in the level of non-­ US dollar loan loss reserves. and exchange-­traded interest rate futures and options. the infrequency of transactions. IFC can be exposed to residual market risks in its overall asset and liability management of the market borrowings funded balance sheet. Borrowing Activities FY13 Market Risk Highlights IFC expands its access to funding and decreases its overall funding cost by issuing debt securities in various capital markets in a variety of currencies. This period was followed by sideways fluctuations in the third quarter of FY13 and the first half of the last quarter of FY13. quarterly portfolio reviews and continued oversight from the Corporate Equity Committee. The overall level of market risk in IFC’s equity portfolio was quite elevated in FY13. The decrease in risk premia was further supported by the United States when it avoided the “fiscal cliff” and the Bank of Japan. over-­ t hecounter foreign exchange forwards (covered forwards). single bond issue concentration limits and percentage of total bond issuance limits. both in local currency and. To offset this liquidity risk. on a portfolio basis. rebalanced at each calendar month-­ end. a significant portion of the liquid assets is invested in highly liquid securities such as: (i) high quality foreign sovereign. not-­ yet-used. dominated world markets. Residual interest rate risk may arise from differing interest rate reset dates on assets and liabilities or assets that are fully match-­ funded at inception.

(ii) mitigate through contingency planning. in cooperation with the World Bank. as part of its ongoing business. price transparency.8 billion. FUNDING RISK IFC’s primary objective with respect to managing funding risk is to maintain its triple-­ A credit ratings and. while credit spread risk declined in FY13 due to improving credit conditions. »»Extended Risk and Control Self-­ Assessment to all departments. COSO refers to the Internal Control  — ​ 1992 Integrated Framework formulated by the Committee of Sponsoring Organizations of the Treadway Commission. net of derivatives ($11. maintain access to market funding as needed at the lowest possible cost. from Libor minus 10 basis points in FY12. »»Conducted exercises involving individual members of the Management Team. IFC’s Operational Risk Management (ORM) program is based on a directive approved by the Corporate Risk Committee during FY10. »»Ongoing independent review of the effectiveness of IFC’s internal controls in selected key areas and functions performed by the Internal Audit Vice Presidency of the World Bank Group. . IFC: »»Collaborated with the World Bank in updating the World Bank Group Business Continuity Management policy to align with internationally recognized business continuity standards. »»Adoption of the COSO5 control framework as the basis for its evaluation of the effectiveness of its internal controls over financial reporting. FY13 Funding Risk Highlights IFC utilizes risk transfer. The risk of higher funding costs is also reduced by IFC’s annual funding targets. IFC’s ORM approach is designed to ensure that operational risks are identified. liquidity. During FY13. at both the project and the institutional levels for mitigation of low frequency and high severity operational risks. IFC continued the program established in FY12 for obtaining annual written assertions on operational risk management by Vice Presidents and Directors. Net interest rate risk of IFC’s Liquid Asset portfolios remained concentrated in short-­ maturity obligations and the spread risk is well diversified by sector and geography. IFC’s Discount Note Program provides swift access to funded liquidity. During FY13. FY13 Liquidity Risk Highlights On June  30.9 billion in FY12 and $10.3 billion ($1. whether by subcontracting. measuring. or insurance. people and systems or from external events. in anticipation of an exercise for the whole Management Team. »»Ensuring that processes and controls are in place to manage the risks in new products and initiatives before they are executed. »»Continued rolling out other operational risk management methodologies and tools. »»Maintained Emergency Management Teams in all regions. IFC also continues to focus on its preparedness to react to an emergency situation that could disrupt its normal operations.3  billion in FY11). Current levels of liquid assets also represented 309% of the sum of (i) 100% of committed but undisbursed straight senior loans. 2013. which was convened by the US Congress in response to the well-­ publicized irregularities that occurred in the financial sector in the United States during the late 1980s. the US$ benchmark bonds. (ii) 30% of committed guarantees. 2012). 2013 was $1. This directive establishes the approach and roles and responsibilities for operational risk management in the Corporation. IFC is continuing a multiyear effort to develop and implement enhanced methodologies for identifying. OPERATIONAL RISK Consistent with “Internal Convergence of Capital Measurement and Capital Standards. Other key components of IFC’s operational risk management approach include: »»Operational risk assessment and measurement based on market practices and tools. thereby. IFC also insures its corporate assets and operations against catastrophic losses where commercially viable. »»Conducted events to promote and raise awareness of operational risk management. FY13 Operational Risk Highlights During FY13. IFC defines operational risk as the risk of loss resulting from inadequate or failed internal processes. and held emergency management workshops and simulations in larger country offices in one region. assessed. and tracks its effectiveness over time. Accessing the capital markets for financing establishes investor confidence. IFC also: »»Formalized a network of departmental Operational Risk Management Liaisons and provided training for them in applying operational risk management tools to their business processes. root cause analysis and key risk indicators. and a diversified investor base. all of which help to reduce financing cost. 2012). implements the optimal structure. »»Promoting data integrity in the Corporation based on its data management policy. The outstanding balance under the Discount Note Program at June 30. to complement traditional funding sources. and managed so as to minimize potential adverse impacts and to enable Senior Management to determine which risks IFC will: (i) manage internally.2  billion ($30. »»Conducted emergency simulation exercises in Washington. including risk events tracking.4 billion — J ​ une 30. IFC identifies and evaluates risks. outsourcing. 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. and to provide a natural funding source for short term financing programs. credit spreads for IFC’s new borrowings deteriorated to around Libor flat for a 5 year term issue. At both levels. through a New Initiative and Product Assessment Group with representation from key business and support functions. and (iii) 30% of committed client risk management products (327% on June 30.4 billion on June 30. and the Discount Note Program.20 _ IFC Financials anD ProJecTs 2013 IFC’s liquid assets maintained similar exposure to high credit quality counterparties. To support this. IFC raised $12. or (iii) transfer to third parties. determines available contractual transfer and insurance options. 5. A Revised Framework” issued by the Basel Committee on Banking Supervision in June 2004. IFC’s liquid assets portfolio stood at $31. including insurance. monitoring and managing operational risk in its key activities. 2012).

updated Business Continuity Plans for departments responsible for critical business processes. all of its liquid asset trading securities and certain borrowings. liquid assets. equity investments and debt securities. and guarantees. and forwards. IFC classifies all financial instruments accounted for at fair value based on the fair value hierarchy established by accounting standards for fair value measurements and disclosures as described in more detail in Notes A and R to IFC’s FY13 Consolidated Financial Statements. Loans written off. the equity investment is written down to its impaired value. and management’s best estimate of future benefit cost changes and economic conditions. Many of IFC’s financial instruments are classified in accordance with the fair value hierarchy established by accounting standards for fair value measurements and disclosures where the fair value and/or impairment is estimated based on internally developed models or methodologies utilizing significant inputs that are non-­observable. debt securities. floors. »»Determining the fair value of certain equity investments. Impairment losses on equity investments accounted for at cost less impairment are not reversed for subsequent recoveries in value of the equity investment until it is sold. Certain of these policies are considered to be “critical” to the portrayal of IFC’s financial condition and results of operations. loans. 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. IFC generally presumes that all equity impairments are deemed to be other-­than-temporary. However. When impairment is identified. »»Continued to implement the information technology disaster recovery testing strategy established in FY12 by performing component and integration tests for most applications supporting critical business processes. since they require management to make difficult. as well as any subsequent recoveries. »»Began planning for a comprehensive update to IFC’s Business Impact Analysis in FY14. VI. These policies include: »»Determining the level of reserves against losses in the loan portfolio. are separately accounted as either derivative assets or liabilities. Due to the inherent limitation of any particular estimation technique. When impairment is identified and is deemed to be other-­ t han-temporary. for accounting purposes. . but the security has suffered a credit loss. including puts. IFC assesses all debt security investments accounted for at fair value through OCI for impairment each quarter. caps. Recoveries in value on equity investments accounted for at fair value through OCI that have been the subject of an other-­ than-temporary impairments are reported in OCI until sold. The reserve is established through periodic charges to income in the form of a provision for losses on loans. and »»Determining the future pension and postretirement benefit costs and obligations using actuarial assumptions based on financial market interest rates. VALUATION OF FINANCIAL INSTRUMENTS WITH NO QUOTED MARKET PRICES IFC considers a loan as impaired when. »»Determining the level and nature of impairment for equity investments and debt securities carried at fair value with changes in fair value being reported in other comprehensive income (OCI) and for equity investments accounted for at cost less impairment (where impairment is determined with reference to fair value). loans. are recorded through the reserve. complex or subjective judgments. This Board of Directors-­ approved framework uses actual loan loss history and aligns the loan loss provisioning framework with IFC’s capital adequacy framework. geographical concentration. The reserve against losses for loans also includes an estimate of probable losses on loans inherent in the portfolio but not specifically identifiable. based on current information and events. regional and macroeconomic conditions. RESERVE AGAINST LOSSES ON LOANS The assessment of the adequacy of reserves against losses for loans is highly dependent on management’s judgment about factors such as its assessment of the financial capacity of borrowers. In addition. The reserve against losses on loans is separately reported in the consolidated balance sheet as a reduction of IFC’s total loans. including a discussion of recently adopted accounting standards and accounting and financial reporting developments.ManagemenT’s Discussion anD Analysis _ 21 »»Leveraging Business Impact Analysis results. which becomes the new cost basis in the equity investment. IFC reports at fair value all of its derivative instruments. various investment agreements contain embedded or stand-­ alone derivatives that. which have no quoted market prices and are accounted for at fair value. CRITICAL ACCOUNTING POLICIES Note A to IFC’s FY13 Consolidated Financial Statements contain a summary of IFC’s significant accounting policies. industry. the credit-­ related impairment loss is recognized in net income and the non-­ credit related loss is recognized in OCI. management utilizes a capital pricing and risk framework to estimate the probable losses on loans inherent in the portfolio but not specifically identifiable. The reserve against losses on loans relates only to the Investment services segment of IFC (see Note T to the FY13 Consolidated Financial Statements for further discussion of IFC’s business segments). the entire impairment is recognized in net income if certain conditions are met (as detailed in Note A to IFC’s FY13 Consolidated Financial Statements). some of which may relate to matters that are inherently uncertain. past experience. 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. it is probable that IFC will be unable to collect all amounts due according to the loan’s contractual terms. and historical trends. borrowings and derivatives. OTHER-­THAN-TEMPORARY IMPAIRMENTS ON EQUITY INVESTMENTS AND DEBT SECURITIES IFC assesses all equity investments accounted for at fair value through OCI and all equity investments accounted for at cost less impairment for impairment each quarter. if IFC does not intend to sell the debt security and it is not more likely than not that IFC will be required to sell the security. and conducted a business continuity exercise for one critical Treasury process.

and liquidity of certain asset classes within the liquid asset portfolio. gains on non-­ monetary exchanges and unrealized gains and losses on equity investments). interest rates. Unrecognized net actuarial gains and losses and unrecognized prior service costs on benefit plans . VII. warrants and stock options which in part are dependent on the global climate for emerging markets. differences between changes in fair values of borrowings. and related volatility and expected movement in foreign currency exchange rates. please refer to Note W to the FY13 Consolidated Financial Statements.22 _ IFC Financials anD ProJecTs 2013 Many of IFC’s financial instruments accounted for at fair value are valued based on unadjusted quoted market prices or using models where the significant assumptions and inputs are market-­ observable. dividends. Realized and unrealized gains and losses on the liquid asset portfolios. Principally. which are driven by external factors such as: the interest rate environment. For further details. Level of the Board of Governors-­ approved grants to IDA. and the approved administrative and other budgets. including an assessment about the counterparty’s financial position and prospects. and management’s best estimate of future benefit cost changes and economic conditions. The fair values of financial instruments valued using models where the significant assumptions and inputs are not market-­ observable are generally estimated using complex pricing models of the net present value of estimated future cash flows. the fair value of plan assets and the funded status associated with these plans are based on financial market interest rates. IFC and MIGA based upon their employees’ respective participation in the plans. Significant Influences Liquid asset income Income from the equity investment portfolio Provisions for losses on loans and guarantees Other income and expenses Gains and losses on other non-­ trading financial instruments accounted for at fair value Grants to IDA Other comprehensive income: Unrealized gains and losses on listed equity investments and debt securities accounted for as available-­ for-sale Global climate for emerging markets equities. equity impairments. in pension and postretirement benefit plans that cover substantially all of their staff members. fluctuations in currency and commodity markets and company-­ specific performance for equity investments. Management makes numerous assumptions in developing pricing models. the level of expense from the staff retirement and other benefits plans. Returns on pension plan assets and the key assumptions that underlay projected benefit obligations. and management’s best estimate of future benefit cost changes and economic conditions. assets and liabilities associated with the plans are allocated between IBRD. including financial market interest rates. Performance of the equity portfolio (principally realized capital gains. These securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non-­ observable. Level of advisory services provided by IFC to its clients. fluctuations in currency and commodity markets and company-­ specific performance. along with IBRD and MIGA. and associated derivative instruments and unrealized gains associated with the investment portfolio including puts. The fair value computations affect both the Investment services and Treasury segments of IFC (see Note T to the FY13 Consolidated Financial Statements for further discussion of IFC’s business segments). including IFC’s credit spread. Risk assessment of borrowers and probability of default and loss given default. Such equity investments are valued using unadjusted quoted market prices and debt securities are valued using internally developed models or methodologies utilizing inputs that may be observable or non-­ observable. PENSION AND OTHER POSTRETIREMENT BENEFITS IFC participates. the appropriate discount rates. Global climate for emerging markets equities. past experience. Nonaccruals and recoveries of interest on loans formerly in nonaccrual status and income from participation notes on individual loans are also included in income from loans. staff expenses. All costs. Changes in assumptions could have a significant impact on the amounts reported as assets and liabilities and the related unrealized gains and losses reported in the income statement and statement of OCI. RESULTS OF OPERATIONS OVERVIEW The overall market environment has a significant influence on IFC’s financial performance. past experience. The underlying actuarial assumptions used to determine the projected benefit obligations. The main elements of IFC’s net income and comprehensive income and influences on the level and variability of net income and comprehensive income from year to year are: Elements Net income: Yield on interest earning assets Market conditions including spread levels and degree of competition.

The disbursed loan portfolio grew by $1. from $21. and where pre-­determined sales trigger levels had been met and. as compared with $2.000 1. and $272  million on equity investments accounted for at cost less impairment).079  million.7% at June 30. A more detailed analysis of the components of IFC’s net income follows.059  million.350 million. as compared with $692  million in FY12 ($420  million on equity investments accounted for as available-­ for-sale. Net loss attributable to noncontrolling interest totaled $8 million in FY13 as compared to $0 in FY12. a decrease of $26 million. net Expenses from pension and other postretirement benefit plans Unrealized gains on equity investments Income from liquid asset trading activities Other-­ than-temporary impairments on equity investments Other. where applicable. Unrealized gains on loans accounted for at fair value and gains on non-­ monetary exchanges were $34 million higher than in FY12. The weighted average contractual interest rate on loans at June 30. net Overall change $ ( 1. IFC sells equity investments where IFC’s developmental role was complete.877 million in FY12. Other-­ t han-temporary impairments on equity investments totaled $441 million in FY13 ($289 million on equity investments accounted for as available-­ for-sale. compared with $938 million in FY12.328 million in FY12.5%. net income attributable to IFC totaled $1. IFC has reported income before grants to IDA of $1. net of reversals of income on loans placed in nonaccrual status were $26 million lower than in FY12. compared to 11 investments generating individual capital gains in excess of $20 million for a total of $1. Grants to IDA totaled $340  million in FY13. reflecting the weaker performance of emerging markets equities in general. Accordingly. Such . Income from IFC’s participation notes over and above minimum contractual interest and other income were $3 million lower than in FY12. $641 million higher than net losses of $219  million in FY12. three investments generated individual other-­ t han-temporary impairments in excess of $20 million for a total of $90 million. Other-­ than temporary impairments on equity investments in FY13 were concentrated in the last three months of FY13.606 million at June 30. lock ups have expired. Recoveries of interest on loans removed from non-­ accrual status.018  million in FY13. 2012 to $22. or 61%. FY13 VERSUS FY12 Net Income IFC’s primary interest earning asset is its loan portfolio. as compared with $3 million in FY12. and FY12 and FY11. Income from the equity investment portfolio decreased by $705 million from $1.821 million. covering the periods included in IFC’s FY13 Consolidated Financial Statements.658  million in FY12. as compared with $274 million in FY12. The decrease in income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA in FY13 when compared to FY12 was principally as a result of the following (US$ millions): Increase (decrease) FY13 vs FY12 Realized capital gains on equity investments Provisions for losses on loans. Certain amounts in FY12 and FY11 have been reclassified to conform to the current year’s presentation. There were no gains on sale of loans in FY13 as compared to $2 million in FY12. INCOME FROM EQUITY INVESTMENTS IFC reported income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA of $928 million in FY13. the following paragraphs reflect reclassified prior year comparative information. Gains on non-­monetary exchanges in FY13 totaled $6 million. gas and mining sectors accounted for under the cost recovery method.457 million in FY12 to $752 million in FY13. These factors combined resulted in $90 million higher interest income than in FY12. or 91%.250 1. versus 4. as compared with a net income of $1. Such reclassifications had no effect on net income or total assets. Accordingly. Total realized gains on equity investments are concentrated — ​in FY13. eight investments generated individual other-­ t han-temporary impairments in excess of $20  million for a total of $298  million. 2012. 2013 is presented below (US$ millions): Net Income (loss) US$ millions 2009 2010 2011 2012 2013 -250 0 250 500 750 1. guarantees and other receivables Foreign currency transaction gains and losses on non-­ trading activities Advisory services expenses. Dividend income in FY13 included returns from four unincorporated joint ventures (UJVs) in the oil. Income from loans and guarantees for FY13 totaled $1. Where applicable. 10 investments generated individual capital gains in excess of $20 million for a total of $562 million. In FY13. The decrease was largely due to a one time dividend from one investment in FY12 in the amount of $41 million that did not recur in FY13. 2013 was 4. $308 million lower than income before grants to IDA of $1. an increase of $121 million. as compared to $330 million in FY12. and $152  million on equity investments accounted for at cost less impairment). of the FY12 realized gains.500 17. of the FY13 realized gains.ManagemenT’s Discussion anD Analysis _ 23 IFC’s net income (loss) for each of the past five fiscal years ended June 30. which totaled $36 million. as compared to $1.079) (126) (110) (91) (77) 154 187 251 (58) $ (949) Net gains on other non-­ trading financial instruments accounted for at fair value totaled $422 million in FY13.043 million at June 30.000 million for FY12. a decrease of $1. as compared with $43 million from three such UJVs in FY12. In FY12. Commitment and financial fees were $28  million higher than in FY12. IFC generated realized gains on sales of equity investments for FY13 of $921 million. Dividend income totaled $248  million.50 Income From Loans and Guarantees The following paragraphs detail significant variances between FY13 and FY12. 2013.563  million.

to $43. and excluding short-­ term borrowings issued under the Discount Note Program. IFC’s P0 portfolio earned $2 million in FY13. to $31. The P1 portfolio generated a return of $292 million in FY13.9 billion at June 30. 2013. During FY13. OTHER EXPENSES The liquid assets portfolio. guarantees and other receivables of $243 million in FY13 ($298 million of specific provisions for losses on loans. Other income in FY13 includes management fees and service fee reimbursements from AMC of $40 million ($28 million in FY12) and income from advisory services of $239 million ($269 million in FY12). except for the P4 portfolio (which has a Net Asset Value (NAV) of $769 million and marginally underperformed).6%) at June 30. 2012) are held against impaired loans of $1. net of borrowing-­ related derivatives and before fair value adjustments. 2012). Unrealized gains on equity investments in FY13 totaled $26 million.5%) in FY13. when comparing FY13 and FY12. CHARGES ON BORROWINGS The quality of IFC’s loan portfolio.4%. managed against the Administrative expenses (the principal component of other expenses) increased by $47 million from $798 million in FY12 to $845 million in FY13. The P6 local currency liquidity portfolio generated income of $42 million (4.3%) in FY13.403 million ($923 million at June 30. 2013. return in FY12. respectively. or 0.6%. In FY13. a return of 0. One investment accounted for $217 million of unrealized gains in FY13. $1 million less than the $43 million (5. all liquid asset portfolios outperformed their respective benchmarks. Advisory services expenses included $210 million of funds contributed by donors that were utilized in the provision of advisory services in FY13 ($189 million — F ​ Y12). The P2 and externally-­managed P4 portfolios returned $147 million (3. 2012 to $1. net of derivatives and securities lending activities. Interest income in FY13 totaled $430  million. 2012. Holdings in other products. as compared with $96 million in FY12. Seven investments in equity funds accounted for $162 million of the unrealized losses in FY13. By another measure.24 _ IFC Financials anD ProJecTs 2013 impairments totaled $201 million in the last three months of FY13. 2012). In FY12. respectively. after the effects of borrowing-­ related derivatives. 2012).7 billion at June 30. OTHER INCOME Other income of $441 million for FY13 was $7 million lower than in FY12 ($448  million). as compared with $22 million in FY12).6 billion in FY12). the portfolio of ABS and MBS experienced fair value gains totaling $161  million in FY13. INCOME FROM DEBT SECURITIES Income from debt securities decreased to $5  million in FY13 from $81  million in FY12. In addition.2%) and $14 million (2. IFC recorded provision for losses on loans.2 billion during FY13 from $40.4% at June  30. as compared to $240 million in the first nine months of FY13. income from advisory services included $210 million contributed by donors ($189 million — ​ F Y12) and $29 million of fees from clients and administrative fees from donors ($25 million — ​F Y12). IFC recorded expenses from pension and other postretirement benefit plans in FY13 of $173 million. The weighted average rate of IFC’s borrowings outstanding from market sources. 2012. . Advisory services expenses totaled $351  million in FY13 ($290  million in FY12). The externally managed P3 portfolio. PROVISION FOR LOSSES ON LOANS AND GUARANTEES AND OTHER RECEIVABLES same variable rate benchmark as the P1 portfolio.2% of the disbursed loan portfolio (6. largely reflecting the increased level of borrowings partly set off by lower US dollar interest rate environment. 2013 of $741 million ($447 million at June 30.4 billion at June 30. increased by $3.6% at June 30. from $181  million in FY12 to $220  million in FY13. $39  million of portfolio provisions for losses on loans and $2 million of provision for losses on guarantees and other receivables).9%. driven largely by a 6. Income from liquid asset trading activities totaled $500 million in FY13 ($313 million in FY12). non-­ performing loans increased from $859  million (4. to a lesser extent. or 1.0%) in FY12. On June  30. At June 30. or 1. or 1. a decrease of $76  million.272 million (5. high quality corporate bonds and derivatives generated $91 million of losses in FY13.7% at June  30. $3 million higher than the $14 million. a net gain of $70 million. Charges on borrowings of $220 million in FY13 ($181 million in FY12) are reported net of gains on buybacks of $11 million ($19 million in FY12). 2013. $49 million release of portfolio provisions for losses on loans. a coverage ratio of 53% (48%).4 billion of its market borrowings ($0. the P1 portfolio generated a return of $217 million. declined during the year from 0. as measured by average country risk ratings and average credit risk ratings was substantially unchanged during FY13. 2013.5%) in FY12.1%) and $2 million (0. Administrative expenses include the grossing-­up effect of certain revenues and expenses attributable to IFC’s reimbursable program and expenses incurred in relation to workout situations (Jeopardy Projects) ($26 million in FY13. Individual investments in such Funds provided a significant component of such unrealized gains and losses. 2013.7%) in FY12. The size of the borrowings portfolio (excluding the short-­ term Discount Note Program). as compared to $62 million (1. The largest components of the decrease were higher other-­ t han-temporary impairments ($19 million) and unrealized losses on debt securities accounted for at fair value ($60 million) in FY13 when compared with FY12. and $6 million release of provision for losses on guarantees and other receivables) as compared to provisions for losses of $117  million in FY12 ($76  million of specific provisions for losses on loans. Specific reserves against losses at June 30. IFC’s total reserves against losses on loans were 7. salary increases to existing staff. trading securities with a fair value of $85 million are classified as Level 3 securities ($150 million on June 30. 2013. Seven investments in equity funds accounted for $146 million of the unrealized losses in FY12. including US Treasuries. In FY13 and FY12. 2012.7% increase in staffing and. IFC bought back $0. returned $17 million in FY13. an increase driven by actuarial assumptions related to the funding status of the various benefit plans at June 30. INCOME FROM LIQUID ASSET TRADING ACTIVITIES IFC’s charges on borrowings increased by $39  million.2 billion at June  30. increased from $30. 2012 to 0.1%. as compared to $7 million (0. Realized gains on debt securities were $2 million lower in FY13 as compared to FY12.1%) of the disbursed loan portfolio at June 30.9%. global government bonds. as compared with unrealized losses of $128 million in FY12.

Changes in unrealized gains and losses on equity investments and debt securities reported in OCI are significantly impacted by (i) the global environment for emerging markets. warrants and interest rate and currency swaps economically hedging the fixed rate and/or non-­ US$ loan portfolio) of $390 million in FY13 (net losses of $13 million in FY12).ManagemenT’s Discussion anD Analysis _ 25 NET GAINS AND LOSSES ON OTHER NON-­ TRADING FINANCIAL INSTRUMENTS As discussed in more detail in Note A to IFC’s FY13 Consolidated Financial Statements. then. The net change in unrealized gains and losses on equity investments and debt securities in OCI can be summarized as follows: FY13 Net unrealized gains and losses on equity investments arising during the year: Unrealized gains Unrealized losses Reclassification adjustment for realized gains and other-­ than-temporary impairments included in net income Net unrealized gains and losses on equity investments Net unrealized gains and losses on debt securities arising during the year Unrealized gains Unrealized losses $ 194 $ 85 $ 757 $ 290 FY12 (396) (813) 24 $ 385 277 $ (246) (201) (358) Reclassification adjustment for realized gains. IFC reported net gains on derivatives associated with investments (principally put options. Gains and losses are highly concentrated. non-­ credit related portion of impairments which were recognized in net income and other-­ thantemporary included in net income 29 Net unrealized gains and losses on debt securities Total unrealized gains and losses on equity investments and debt securities $ 22 $ 407 14 $ (259) $ (505) Unrecognized net actuarial gains and losses and unrecognized prior service costs on benefit plans Changes in the funded status of pension and other postretirement benefit plans are recognized in OCI. offset by losses on associated derivatives. and (ii) all equity investments in which IFC has greater than 20% holdings and/or equity and fund investments which. During FY13. unrealized gains are recorded and when credit spreads narrow. Other Comprehensive Income FY12 $ 11 10 Unrealized gains and losses on equity investmenTS and debt securities Non-­ monetary gains on derivatives associated with investments Unrealized gains and losses on derivatives associated with investments 353 (34) (206) $ (219) Unrealized gains and losses on market borrowings and associated derivatives. but moved back to 5 to 10 basis points below LIBOR by the end of FY12 for US$ issuances at 5 year tenor. resulting from the increase in the discount rates used to determine the . IFC accounts for certain financial instruments at fair value with unrealized gains and losses on such financial instruments being reported in net income. IFC’s policy is to generally match currency. Grants to IDA During FY13. to the extent they are not recognized in net income under periodic benefit cost for the year. bond markets weakened on the prospect of tighter liquidity conditions amid signs of accelerating US economic activity. namely: (i) all swapped market borrowings. and (ii) the realization of gains on sales of such equity investments and debt securities. The resulting effects of fair value accounting for these non-­ trading financial instruments on net income in FY13 and FY12 are summarized as follows (US$ millions): FY13 Realized gains and losses on derivatives associated with investments $ 35 2 issuance deteriorated by around 10 basis points in FY13 contributing to overall unrealized gains on market borrowings and associated derivatives of $32 million. equity and debt security portfolios continue to be accounted for at fair value. as compared with $330 million in FY12. As credit spreads widen. unsettled conditions in European sovereign debt markets and renewed signs of flagging economic activity were accompanied by further interest rate declines from already low levels. unrealized losses are recorded (notwithstanding the impact of other factors. amount and timing of cash flows on market borrowings with cash flows on associated derivatives entered into contemporaneously. This led to better pricing for triple-­ A IFC issues which in FY11 sat at around LIBOR flat. interest rate levels remained stable through the first nine months of the year. in the absence of the Fair Value Option. In FY12. IFC experienced a gain of $201 million primarily due to $200  million of unrecognized net actuarial gains. IFC reported unrealized losses in FY12 of $206 million. In FY13. Benchmark 5 year US$ interest rates jumped around 50 basis points during the last three months of FY13 causing large revaluation gains on IFC’s portfolio of medium to long term borrowings. in the last three months of FY13. The magnitude and direction (gain or loss) can be volatile from period to period but do not alter cash flow. IFC recorded a grant to IDA of $340 million. includes the impact of changes in IFC’s own credit spread when measured against US$ LIBOR. with five derivatives accounting for $153 million of gains and five derivatives accounting for $73  million of losses in FY13 (five derivatives accounting for $113 million of gains and five derivatives accounting for $73 million of losses in FY12). conversion features. including stand-­ alone and embedded derivatives in the loan. with unrealized gains and losses on such investments being reported in OCI until realized. Credit spreads for benchmark IFC USD IFC’s investments in debt securities and equity investments that are listed in markets that provide readily determinable fair values are classified as available-­for-sale. All other non-­trading derivatives. and (iii) substantially all market borrowings. net of associated derivatives and accordingly. would be required to be accounted for under the equity method. This development. net. When realized. resulted in adverse after swap revaluations on market borrowings. net 32 Net gains and losses on other non-­ t rading financial instruments accounted for at fair value $ 422 Changes in the fair value of IFC’s market borrowings and associated derivatives. such as changes in risk-­ free interest and foreign currency exchange rates). Risk appetites in the capital markets receded. stock options. as evidenced by some flight to quality along the credit spectrum. the gain or loss is transferred to net income. along with movements in foreign exchange basis swap rates.

increased from 3. an increase of $35 million. 2011. as compared with $218  million in FY11 ($131  million on equity investments accounted for as available-­ for-sale. Individual investments in such Funds provided a significant component of the unrealized gains and losses. Grants to IDA totaled $330 million in FY12.159  million. The disbursed loan portfolio grew by $1. lock ups have expired.328  million in FY12. IFC generated record realized gains on sales of equity investments for FY12 of $2. as compared to $2. Income from loans and guarantees IFC’s primary interest earning asset is its loan portfolio. .658  million in FY12. a significant amount of IFC’s dividend income in FY12 was due to returns on IFC’s joint ventures in the oil. Unrealized gains Income from the equity investment portfolio decreased by $7 million from an income of $1. an increase of $1. These factors resulted in $90 million higher interest income than in FY11.884 million at June 30. as compared with $217 million in FY11. In FY11. Income from equity investments IFC reported income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA of $1.263 million. The largest compo­ nents of the increase were higher interest income ($21 million) and higher unrealized gains on debt securities accounted for at fair value ($23  million) in FY12 when compared with FY11. and where pre-­ determined sales trigger levels had been met and. as compared with gains of $454 million in FY11. Other-­ t han-temporary impairments on equity investments totaled $692 million in FY12 ($420 million on equity investments accounted for as available-­ for-sale.464  million in FY11 to $1. Six investments in equity funds accounted for $199 million of the unrealized gains in FY11. gas and mining sectors accounted for under the cost recovery method.6% at June 30. There were no other investments that generated an other-­ than-temporary impairment loss in excess of $20 million. IFC sells equity investments where IFC’s developmental role was complete. which totaled $43 million in FY12.579 million in FY11. The decrease in income before net gains and losses on other non-­ trading financial instruments accounted for at fair value and grants to IDA in FY12 when compared to FY11 was principally as a result of (US$ millions): Increase (decrease) FY12 vs FY11 Unrealized losses on equity investments accounted for at fair value Other-­ than-temporary impairments on equity investments Income from liquid asset trading activities Gains on non-­ monetary exchanges Provisions for losses on loans. The discount rate assumption used to determine the projected benefit obligation for the largest benefit plan. In FY12.6% at June 30. Gain on sales of loan was $2 million as compared to no such gains in FY11. compared to 10 investments generating individual capital gains in excess of $20 million for a total of $416 million. Recoveries of interest on loans removed from non-­ accrual status. A more detailed analysis of the components of IFC’s net income follows. 11 investments generated individual capital gains in excess of $20 million for a total of $1.000 million. as compared with $280 million in FY11. 2011 to $21. There were two large transactions that resulted in the recording of gains on non-­ monetary exchanges in FY11 that did not recur in FY12.043 million at June 30. Dividend income totaled $274  million. Unrealized losses on equity investments that are accounted for at fair value through net income in FY12 totaled $128 million. net Foreign currency transaction gains and losses on non-­ trading activities Realized capital gains on equity investments Other. resulting in income before grants to IDA of $1. versus 4.457  million in FY12. as compared to $2. or 91%. eight investments generated individual other-­ t han-temporary impairments in excess of $20 million for a total of $298 million.7%. Realized gains on debt securities were $14 million higher in FY12 as compared to FY11.263 (77) $ (147) Net losses on other non-­trading financial instruments accounted for at fair value totaled $219 million in FY12 (net gains of $155 million in FY11). 2013. Accordingly. compared with $877 million in FY11. Gains on non-­monetary exchanges in FY12 totaled $3 million. 2012. of the FY12 gains. FY12 VERSUS FY11 Net Income on loans accounted for at fair value and gains on non-­ monetary exchanges were $67 million lower than in FY11. The weighted average contractual interest rate on loans at June 30. Consistent with FY11. from $19.821 million.877  million in FY12. net income totaled $1. Seven investments in equity funds accounted for $146  million of the unrealized losses in FY12. as compared with $1. where applicable.024  million in FY11. one investment generated an other-­ t han-temporary impairment loss of $40 million.26 _ IFC Financials anD ProJecTs 2013 projected benefit obligations and higher return on pension assets.9% at June 30. and $87  million on equity investments accounted for at cost less impairment). and $272  million on equity investments accounted for at cost less impairment). the Staff Retirement Plan. Commitment and financial fees were $12 million higher than in FY11. Total realized gains on equity investments are concentrated — ​in FY12. net Overall change $ (582) (474) (216) (214) (157) 132 178 1. guarantees and other receivables Advisory services expenses. net of reversals of income on loans placed in nonaccrual status were $14 million higher than in FY11. Income from IFC’s participation notes over and above minimum contractual interest and other income were $10  million higher than in FY11. of the FY11 gains. as compared with $737 million for FY11. Income from loans and guarantees for FY12 totaled $938 million. as compared with $57 million in FY11. an increase of $61 million. 2012 was 4. or 56%. 2012 to 4. Income from debt securities Income from debt securities increased to $81 million in FY12 from $46 million in FY11.179 million in FY11. as compared to $600 million in FY11.

15%) in FY12 as compared to earning $1 million (1. salary increases to existing staff. 2011. In FY12. Administrative expenses include the grossing-­ up effect of certain revenues and expenses attributable to IFC’s reimbursable program and Jeopardy Projects ($22  million in FY12. The externally managed P3 portfolio. non-­ performing loans decreased from $943  million (4. IFC As discussed in more detail in Note A to IFC’s FY12 Consolidated Financial Statements.5 million (1.5 billion at June 30. 2012. 2011). Income from liquid asset trading activities totaled $313 million in FY12 ($529 million in FY11). Advisory services expenses included $189 million of funds contributed by donors that were utilized in the provision of advisory services. the portfolio of ABS and MBS experienced fair value losses totaling $8  million in FY12. 2011) are held against impaired loans of $923 million ($918 million at June 30.64%. respectively. in the absence of the Fair Value Option.7 billion at June 30. 2011). as compared to $179  million (3. or 1. The liquid assets portfolio. largely reflecting the higher US dollar interest rate environment and increased level of borrowings. high quality corporate bonds and derivatives generated $327 million of losses in FY12. to $40. and (ii) all equity investments in which IFC has greater than 20% holdings and/or equity and fund investments which.3% at June 30. and excluding short-­ term borrowings issued under the Discount Note Program. 2012.32%) in FY11. The P7 portfolio earned less than $0. from $140 million in FY11 to $181 million in FY12. Other income Income from liquid asset trading activities comprises interest from time deposits and securities. as compared to $4 million (0. except for the P7 portfolio (which has an NAV less than $10 million). Holdings in other products. Other expenses Administrative expenses (the principal component of other expenses) increased by $98  million from $700  million in FY11 to $798 million in FY12. and a small currency effect. In FY11. 2012.15%) and $13 million (2.7% at June  30.ManagemenT’s Discussion anD Analysis _ 27 Provision for losses on loans and guarantees The quality of IFC’s loan portfolio. $7 million higher than the $6 million. net gains and losses on trading activities. equity and debt security portfolios continue to be accounted for at fair value. All other non-­trading derivatives. IFC’s P0 portfolio earned $9 million in FY12. 2012. 2011 to 0. During FY12.87%) in FY11. The size of the borrowings portfolio (excluding the short-­ term Discount Note Program). The P1 portfolio generated a return of $218 million in FY12. namely: (i) all swapped market borrowings. income from advisory services included $189 million contributed by donors and $25 million of fees from clients and administrative fees from donors. 2011. Income from liquid asset trading activities bought back $0. after the effects of borrowing-­ related derivatives. the P1 portfolio generated a return of $330 million. respectively. as compared with $24  million in FY11). Net gains and losses on other non-­trading financial instruments IFC’s charges on borrowings increased by $41  million. On June  30. Other income in FY12 includes income from the P6 local currency liquidity portfolio of $43 million (reported in income from liquid asset trading in FY13 and amounting to $44 ­million in FY11). . rose during the year from 0. including US Treasuries. or 0. managed against the same variable rate benchmark as the P1 portfolio.6 billion of its market borrowings ($0. 2012.00%) in FY12.95%. 2012 of $447 million ($382  million at June  30. including stand-­ alone and embedded derivatives in the loan. global government bonds. The P2 and externally-­ managed P4 portfolios returned $60 million (1. when comparing FY12 and FY11. to a lesser extent.47%.7%) of the disbursed loan portfolio at June 30. as compared with $109 million in FY11. net of derivatives and securities lending activities. In FY12 and FY11. 2011). a decrease driven by actuarial assumptions. trading securities with a fair value of $150 million are classified as Level 3 securities ($210 million on June 30. increased from $24.8 billion during FY12 from $33. Charges on borrowings Other income of $448  million for FY12 was $226  million higher than in FY11 ($222  million). At June 30. The weighted average rate of IFC’s borrowings outstanding from market sources.6% of the disbursed loan portfolio (6. and $24 million release in portfolio provisions). Advisory services expenses totaled $290  million in FY12 ($153  million in FY11). and (iii) substantially all market borrowings. a coverage ratio of 48% (42%). or 0.44%) in FY11.29%. all liquid asset portfolios. 2012.3 billion in FY11). By another measure. IFC accounts for certain financial instruments at fair value with unrealized gains and losses on such financial instruments being reported in net income. and $3  million release of provision for losses on guarantees) as compared to release of provision of $40 million in FY11 ($16 million release in specific provisions.1%) at June 30. increased by $6. IFC’s total reserves against losses on loans were 6. net of borrowing-­ related derivatives and before fair value adjustments. 2011 to $859 million (4.9 billion at June 30. to $29. as measured by average country risk ratings and average credit risk ratings was substantially unchanged during FY12. Specific reserves against losses at June 30.7 billion at June 30. management fees and service fee reimbursements from AMC of $28 million ($28 million in FY11) and income from advisory services of $269 million ($0 in FY11). $39 million portfolio provisions on loans. IFC recorded an expense from pension and other postretirement benefit plans in FY12 of $96  million.97% return in FY11. would be required to be accounted for under the equity method.33%) and $9  million (1. Charges on borrowings of $181  million in FY12 ($140  million in FY11) are reported net of gains on buybacks of $19 million ($10 million in FY11). or 2.6% at June 30. a total return of 0. returned $13 million in FY12. In addition to interest income and foreign currency transaction gains of $648 million. outperformed their respective benchmarks. IFC recorded provision for losses on loans and guarantees of $112 million in FY12 ($76 million specific provisions on loans. driven largely by a 9% increase in staffing and.

When realized. IFC’s policy is to generally match currency. 2011 to 3.28 _ IFC Financials anD ProJecTs 2013 The resulting effects of fair value accounting for these non-­ trading financial instruments on net income in FY12 and FY11 are summarized as follows (US$ millions): FY12 Realized gains and losses on derivatives associated with investments $ 11 10 Other comprehensive income Unrealized gains and losses on equity investmenTS and debt securities FY11 $ 63 Non-­ monetary gains on derivatives associated with investments Unrealized gains and losses on derivatives associated with investments 22 (23) 93 $ 155 (34) Unrealized gains and losses on market borrowings and associated derivatives. During FY12. As a result. to the extent they are not recognized in net income under periodic benefit cost for the year. as evidenced by some flight to quality along the credit spectrum. unrealized gains are recorded and when credit spreads narrow. In FY10. See notes to FY12 Consolidated Financial Statements — ​ Note W — ​ Pension and Other Postretirement Benefits for further details. along with movements in foreign exchange basis swap rates. unsettled conditions in European sovereign debt markets and renewed signs of flagging economic activity were accompanied by further interest rate declines from already low levels. During FY12. unrealized losses are recorded (notwithstanding the impact of other factors. . as compared with $600 million in FY11. primarily due to an amendment made to the pension plan. The net change in unrealized gains and losses on equity investments and debt securities in OCI can be summarized as follows: FY12 Net unrealized gains and losses on equity investments arising during the year: Unrealized gains Unrealized losses $ 290 $ 697 FY11 (813) (309) (274) $ 114 Reclassification adjustment for realized gains and impairments included in net income 277 Net unrealized gains and losses on equity investments Net unrealized gains and losses on debt securities arising during the year Unrealized gains Unrealized losses $ 85 $ (246) $ 234 (358) (97) Reclassification adjustment for realized gains. Credit spreads were little changed throughout FY11 and resulting pricing was at around LIBOR flat for IFC’s benchmark US$ global bond offerings. Grants to IDA IFC’s investments in debt securities and equity investments that are listed in markets that provide readily determinable fair values at fair value are classified as available-­ for-sale. credit spreads remained elevated relative to the levels that prevailed before FY09. conversion features. primarily due to the decrease in the discount rates used to determine the projected benefit obligations and lower return on pension assets.9% at June 30. Changes in unrealized gains and losses on equity investments and debt securities reported in OCI are significantly impacted by (i) the global environment for emerging markets. amount and timing of cash flows on market borrowings with cash flows on associated derivatives entered into contemporaneously. As credit spreads widen. The magnitude and direction (gain or loss) can be volatile from period to period but do not alter cash flow. as compared to unrealized gains of $93 million in FY11. IFC reported net losses on derivatives associated with investments (principally put options. stock options. net includes the impact of changes in IFC’s own credit spread when measured against US$ LIBOR. IFC experienced a loss of $525 million primarily due to the following factors: Unrecognized net actuarial losses on benefits plans: $501 million of unrecognized net actuarial losses. warrants and swaps associated with loans) of $13 million in FY12 (net gains of $62 million in FY11). but moved back to 5 to 10 basis points below LIBOR by the end of FY12. 2012. Risk appetites in the capital markets receded. as compared to unrealized losses of $226 million in FY10. with five derivatives accounting for $113 million of gains and five derivatives accounting for $73 million of losses in FY12 (five derivatives accounting for $140 million of gains and five derivatives accounting for $58 million of losses in FY11). IFC recorded a grant to IDA of $330 million. resulted in adverse after swap revaluations on IFC’s financial statements and IFC reported unrealized losses for FY12 of $206 million. the gain or loss is transferred to net income. In FY11. The discount rate assumption used to determine the projected benefit obligation for the largest benefit plan. and (ii) the realization of gains on sales of such equity investments and debt securities.3% at June 30. IFC reported unrealized gains for FY11 of $93 million. with unrealized gains and losses on such investments being reported in OCI until realized. This led to better pricing for AAA IFC issues which in FY11 sat at around LIBOR flat. the Staff Retirement Plan. the trend decline in global interest rate paused temporarily in the second quarter of the year and interest rates remained stable at low levels subsequently. Gains and losses are highly concentrated. Unrecognized net prior service cost on benefit plans: $24 million of unrecognized prior service cost. non credit-­ related portion of impairments which were recognized in net income and impairments included in net income Net unrealized gains and losses on debt securities Total unrealized gains and losses on equity investments and debt securities 14 $ 4 141 $ (259) $ (505) $ 255 Unrecognized net actuarial gains and losses and unrecognized prior service costs on benefit plans Changes in the funded status of pension and other postretirement benefit plans are recognized in OCI. decreased from 5. In FY12. such as changes in risk-­ free interest and foreign currency exchange rates). This development. net (206) Net gains and losses on other non-­ t rading financial instruments accounted for at fair value $ (219) Changes in the fair value of IFC’s market borrowings and associated derivatives.

2012. and Administration. Latin America and the Caribbean. effective July 16. Sub-­Saharan Africa. Saadia Khairi’s title changed from Vice President. 2013 whereupon the positions will not be filled. their role is primarily to serve the Board of Directors in discharging its responsibilities. As Committees do not vote on issues. Ms. Director. and Administration will not be filled. Governors are appointed by their member governments for a five-­ year term. The Board of Directors considers proposals made by the President on the use of IFC’s net income: retained earnings and designation of retained earnings and is responsible for the conduct of the general operations of IFC. effective October 1. 2013. members of the Board of Directors are appointed or elected every two years by their member governments. Jin-­ Yong Cai became Executive Vice President and CEO. Effective July 1. which is renewable.ManagemenT’s Discussion anD Analysis _ 29 VIII. Finance and Strategy to Vice President. the President. financial issues and policies which have a bearing on IFC’s financial position and risk-­bearing capacity. and IFC Human Resources business partners. effective July 1. Jim Yong Kim became President. These Directors are neither officers nor staff of IFC. 2013. 2012 and ending on March 31. 2012. The Audit Committee also has the responsibility for reviewing the performance and recommending to the Board of Directors the appointment of the external auditor. Global Infrastructure and Natural Resources. the Board of Directors is composed of 25 Directors. Central Asia. Thierry Tanoh retired as Vice President. The Directors are also responsible for presenting to the Board of Governors. an administrative budget. Europe. Key Responsibilities IFC’s decision-­making structure consists of the Board of Governors. effective February 15. The position of Vice President. except those reserved to the Board of Governors under the Articles of Agreement. Membership on the Audit Committee is determined by the Board of Directors. Mr. Each Committee’s terms of reference establishes its respective roles and responsibilities. Rachel Robbins retired as Vice President and General Counsel. Human Resources. the external auditors. effective February 15. Mr. Human Resource services to IFC will be provided by the World Bank Group Integrated Services. at the Annual meetings. 2012: Dr. 2013. as business requires. as well as monitoring the independence of the external auditor. Middle East and North Africa to Vice President. Communications. the integrity of financial statements. Eastern Europe. the system of internal controls regarding finance. following informal consultation with the Directors. Rashad Kaldany. 2013. 2012. the Board of Directors. accounting and ethics (including fraud and corruption). and Western Europe. Ethiopis Tafara was appointed IFC’s Vice President and General Counsel. the Executive Vice President and CEO. Latin America and the Caribbean. Bernard Sheahan. 2012. The Audit Committee . was Acting Vice President and General Counsel. Global Industries to Vice President and Chief Operating Officer. effective October  31. effective February 15. Risk Management and Reporting. 2013. Deputy General Counsel. audited accounts. In the execution of its role. Risk. Middle East and North Africa. Rashad Kaldany’s title changed from Vice President. Jean Philippe Prosper became Vice President. Vice President and Chief Operating Officer will retire from IFC on September 6. effective November 1. Dimitris Tsitsiragos’ title changed from Vice President. GOVERNANCE AND CONTROL SENIOR MANAGEMENT CHANGES BOARD MEMBERSHIP The following changes occurred in the Senior Management of IFC since June 30. Ms. 2013. 2013. Mr. Dorothy Berry retired as Vice President. 2012 and ending on February 14. effective June 30. Human Resources. Central Asia. 2013. Mr. including the effectiveness of financial policies. serving as a non-­ voting member and as Chairman of the Board of Directors. other officers and staff. The President is the only member of the Board of Directors from management. effective February 15. The Board of Governors may delegate authority to the Board of Directors to exercise any of its powers. The Audit Committee is appointed by the Board of Directors to assist it in the oversight and assessment of IFC’s finances and accounting. Mr. Mr. and an annual report on operations and policies as well as other matters. under the leadership of Sean McGrath. Mr. Currently. Ms. and Western Europe. Mr. the Audit Committee discusses with management. based upon nominations by the Chairman of the Board of Directors. David Harris. The Board of Directors has established several Committees including: »»Audit Committee »»Budget Committee »»Committee on Development Effectiveness »»Committee on Governance and Executive Directors’ Administrative Matters »»Ethics Committee »»Human Resources Committee The Board of Directors and their Committees function in continuous session at the principal offices of IBRD. was appointed Acting Vice President. and the internal auditors. and financial and operational risks. 2013. effective July 16. GENERAL GOVERNANCE In accordance with its Articles of Agreement. AUDIT COMMITTEE Membership The Audit Committee consists of eight Directors. Sub-­ Saharan Africa. The Board of Governors is the highest decision-­ making authority. Mr. Latin America and the Caribbean. The Committee also reviews with the external auditor the financial statements prior to their publication and recommends the annual audited financial statements for approval to the Board of Directors. effective April 1. The Audit Committee participates in oversight of the internal audit function and reviews the annual internal audit plan. Communications. Sub-­ Saharan Africa.

training materials. It meets separately in executive session with the external and internal auditors. with a limitation of two consecutive terms and mandatory rotation thereafter. accounting or other advisors as deemed appropriate. Executive Sessions AUdITOR INdEPENdENCE Under the Audit Committee’s terms of reference.org. upon recommendation of the Audit Committee. KPMG LLP will begin a second five-­ year term as IFC’s external auditor. without management present. and procedures are consistently aligned with the IFC’s business conduct framework. management has concluded that these controls and procedures were effective as of June 30. »»All audit-­related services must be pre-­approved on a case-­by-case basis by the Board of Directors. Communication between the external auditor and the Audit Committee is ongoing. »»Mandatory rebidding of the external audit contract every five years. The appointment of the external auditor of IFC is governed by a set of Board of Director-­ approved principles. which supports the execution of its duties. the institution has in place a code of conduct. In support of this commitment. its system of internal control over its external financial reporting has met the criteria for effective internal control over external financial reporting as described in the Internal Control-­ Integrated Framework issued in 1992 by the Committee of Sponsoring Organizations of the Treadway Commission. members of the Audit Committee may convene in executive session at any time. Concurrently. to allow timely decisions regarding required disclosure by IFC. IFC’s external auditor provides an attestation report on whether management’s assertion regarding the effectiveness of internal control over external financial reporting is fairly stated in all material respects. Managers are responsible for ensuring that internal systems. The Audit Committee meets periodically with the external auditor. the Audit Committee receives a large volume of information. The Audit Committee has the capacity. under exceptional circumstances. Reporting channels include: phone. or would be reasonably likely to materially affect IFC’s internal control over external financial reporting. INTERNAL CONTROL Internal Control Over Financial Reporting Management makes an annual assertion whether. Key features of those principles include: »»Prohibition of the external auditor from the provision of all non audit-­related services. as frequently as is deemed necessary by either party. internal control and auditing processes. The Audit Committee meets both formally and informally throughout the year to discuss relevant matters. Staff Rules clarify and codify the obligations of staff in reporting suspected fraud. Disclosure Controls and Procedures Disclosure 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. and individual members of the Audit Committee have independent access to the external auditor. Staff and Administrative Manuals. In FY14. IFC’s external auditors also follow the communication requirements with audit committees set out under generally accepted auditing standards in the United States of America. Access to Resources and to Management Throughout the year. BUSINESS CONDUCT IFC promotes a positive work environment where staff members understand their ethical obligations to the institution. 2013.30 _ IFC Financials anD ProJecTs 2013 monitors the evolution of developments in corporate governance and the role of audit committees on an ongoing basis and updated its terms of reference in July 2009. This is subject to annual reappointment based on the recommendation of the Audit Committee and approval of a resolution by the Board of Directors. retention and handling of recommendations and concerns relating to business conduct identified during accounting. or through confidential submission through a website. The Audit Committee has complete access to management and reviews and discusses with management topics contemplated in their Terms of Reference. mail. . email. corruption or other misconduct that may threaten operations or governance of the Corporation. management performs an evaluation of internal control over external financial reporting for the purpose of determining if there are any changes made in internal controls during the fiscal year covered by the report that materially affect. As of June 30. 2013. guidance for staff is also provided through programs. these rules offer protection from retaliation. Additionally. entitled Living our Values (the Code). The Code applies to all World Bank Group staff worldwide and is available on www. A third-­ party service offers numerous methods of worldwide communication. Management has undertaken an evaluation of the effectiveness of such controls and procedures. External auditors are appointed to a five-­ year term of service. In addition to the Code. There exists both an Ethics HelpLine and a Fraud and Corruption hotline. IFC has in place procedures for the receipt. to obtain advice and assistance from outside legal. Based on that evaluation. no such changes had occurred. policies. and other resources. which are embodied in its Core Values and Principles of Staff Employment. as of June 30 of each fiscal year. For each fiscal year.worldbank.

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.........761 The notes to the Consolidated Financial Statements are an integral part of these statements ....................774 2.........................................................868 964 20........829 75................. 2012 at lower of cost or fair value..... 2012 (US$ millions) Assets Cash and due from banks ........Notes Q and R ..................................................................................................525 $ 19.............628 ................................... $ 2013 616 5................. $ Time deposits ........ Noncontrolling interests .............................June 30... 2013 and $591 .........381 .................June 30. Trading securities . 2013 and $6.. Derivative liabilities .......................168 31........ Retained earnings .....................................328 5......................................................777 42...............................Notes D.. 2013 and $60 ..............Note M Subscribed and paid-in ...............924 230 44....275 77.....................June 30................................ F and R ..................237 38 22...........................June 30.....151 34... Total IFC capital .........................................713 22.........Note O ......... From market sources at amortized cost ......................Note O ............................................................... $ Borrowings outstanding ..................................... Derivative assets ...................................................June 30...........349 337 $ 2012 1......................372 513 17.....846 42 44................... $43 ............. Securities purchased under resale agreements .................. net of reserve against losses of $1..........................................................665 1.............181 2.........................Notes B.............. 2013 and June 30..............................Notes B............................................ 2012 at fair value............................................................ Accumulated other comprehensive income ....June 30...............................858 55....... From International Bank for Reconstruction and Development at amortized cost ................................ Capital Capital stock................ D......715 42..........761 Liabilities and capital Liabilities Securities sold under repurchase agreements ............... Total assets .... 2013 and June 30............000 ...........831 11....376 2......281 77............................................261 2.. 2012 at fair value) ........................................................335 55............................36 _ INTERNATIONAL FINANCE CORPORATION Page 43 CONSOLIDATED BALANCE SHEETS as of June 30............719 28...........Notes D...........736 1...869 2................. From market sources at fair value .. Receivables and other assets ................................ R and U Loans ($493 ............................................ Payables and other liabilities ... Total investments .889 30......580 75....................677 3........................... Total borrowings ...................403 1.........................................................695 20.............................. E.......615 2....Note L ........ Debt securities ...... Total liabilities ..310 2......................438 4.........580............ Total capital ............... Investments ....... authorized (2.................. D and R ..............................................000 par value each .............................525 $ 2..............................250 $ 6...... E and R .....708 ................................................576 ...................................................June 30...........................................695 2......Note J ..............................................Notes C and R .. 2012) shares of $1......... 2012) .......................................................................121 18....... F.......... Equity investments ($8......580 20........... $ 5. Total liabilities and capital .............Notes K and R ......... 2013 and $1.496 9......................................June 30.......Notes Q and R .......June 30..........................................................397 1....

................................ guarantees and other receivables ........................................................................ Foreign currency transaction gains and losses on non-trading activities..... Income from equity investments ....................................................................658 (330) 1.............................................................816 88 134 222 (700) (153) (109) (19) (981) (33) 2....... Total other expenses ...............................359 313 (181) 2..................................................464 46 2............Note C ................................018 $ $ 11 10 (240) (219) 1.....207) 145 1.. Net gains and losses on other non-trading financial instruments accounted for at fair value ....................................................... Other ........................491 60 269 119 448 (798) (290) (96) (23) (1........................................................ Other .............................................. $ (Provision) release of provision for losses on loans......................................................... Income before net gains and losses on other non-trading financial instruments accounted for at fair value and grants to IDA............Note E ...........328 1.........059 (243) 752 5 1....... Total net gains (losses) on other non-trading financial instruments accounted for at fair value .................................................................................................. $ 2012 2011 1..................................Note B ..........................................................................Note K ................ $ Less: Net loss attributable to noncontrolling interests....................401) 35 928 $ 938 (117) 1................. Income from liquid asset trading activities ....... Net income attributable to IFC ........457 81 2.......................579 1..........877 $ 877 40 1.........................................................................................................................................024 35 2 385 422 1...........010 8 1..................................................................Note X ...... Total income from investments ............................................. Total other income ....................................................... Grants to IDA .....................................................................................................Note G .................... Unrealized gains (losses) .....................................Notes B and N ..................................... 2013 (US$ millions) 2013 Income from investments Income from loans and guarantees ..................427 529 (140) 2....................179 (600) 1......................... Income from investments and liquid asset trading activities..................................328 $ $ 63 22 70 155 2................... Income from debt securities ..................................................573 500 (220) 1............................853 101 239 101 441 (845) (351) (173) (32) (1...........................................Note P Realized gains .................................. Advisory services income ................................579 The notes to the Consolidated Financial Statements are an integral part of these statements ................Note W .... Gains on non-monetary exchanges ...................................................................... Expense from pension and other postretirement benefit plans ........... Other income Service fees ..........Note F ........... Other expenses Administrative expenses .........................................................................Note O .........................INTERNATIONAL FINANCE CORPORATION Page 44 _ 37 CONSOLIDATED INCOME STATEMENTS for each of the three years ended June 30........ Net income .............Note E .................................... after charges on borrowings ............. Advisory services expenses .............. Charges on borrowings ............................. Income before grants to IDA ..............................................350 (340) 1...........

......................................................................................................... Add: reclassification adjustment for other-than-temporary impairments included in net income .............................................................. Less: reclassification adjustment for gains on non-monetary exchanges included in net income ........ Net unrecognized actuarial gains (losses) and unrecognized prior service credits (costs) on benefit plans .. Less: reclassification adjustment for realized gains included in net income ....... Net unrealized gains (losses) on equity investments ......................................................................018 $ 2012 1...................................................328 $ 2011 1................................................................ Add: reclassification adjustment for other-than-temporary impairments included in net income .................626 $ (7) (10) (7) 46 22 1....................................579 (273) (12) (1) 27 (259) 137 2 2 141 (523) (143) 420 (246) (525) (1..................................................................................... $ Other comprehensive income (loss) Unrealized gains and losses on debt securities Net unrealized (losses) gains on available-for-sale debt securities arising during the year ..................................................... Unrealized gains and losses on equity investments Net unrealized gains (losses) on available-for-sale equity investments arising during the year ........38 _ INTERNATIONAL FINANCE CORPORATION Page 45 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME for each of the three years ended June 30.. Add (less): reclassification adjustment for realized (gains) losses included in net income ................................ $ 361 (265) 289 385 201 608 1............... Net unrealized gains (losses) on debt securities............................................................................................................ 2013 (US$ millions) 2013 Net income attributable to IFC ................................. Total other comprehensive income (loss) ..... Total comprehensive income ..........................................................................................920 The notes to the Consolidated Financial Statements are an integral part of these statements ...................................030) 298 $ 388 (405) 131 114 86 341 1..

018 1.Note O At June 30.INTERNATIONAL FINANCE CORPORATION Page 46 _ 39 CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL for each of the three years ended June 30.202 At June 30.279 (610) 756 $ 16.018 608 31 1.543 $ 2.Note O At June 30.121 $ 2.328 (1.579 341 20. 2010 Year ended June 30.307 Designated retained earnings $ 481 Capital stock $ 2.372 $ 20.328 1. 2012 Net income attributable to IFC Other comprehensive loss attributable to IFC Designation of retained earnings Note O Payments received for IFC capital stock subscribed Expenditures against designated retained earnings .018 608 31 46 (8) $ 38 $ 1.695 1.435 $ 278 $ 18. 2013 Undesignated Retained earnings $ 14.579 341 1.359 Noncontrolling interests $ - Total capital $ 18.580 $ $ 1.369 $ 20.367 1.403 $ 22.Note O Noncontrolling interests issued Net loss attributable to noncontrolling interests At June 30.359 1.279 $ $ 1.275 (420) 464 420 (464) - $ 18.030) 3 3 $ 513 $ 2. 2011 Net income attributable to IFC Other comprehensive income attributable to IFC Designation of retained earnings Note O Expenditures against designated retained earnings .788 $ 1. 2013 Net income attributable to IFC Other comprehensive income attributable to IFC Payments received for IFC capital stock subscribed Designation of retained earnings Note O Expenditures against designated retained earnings .237 The notes to the Consolidated Financial Statements are an integral part of these statements .580 (399) 399 - 412 $ 17.369 Total IFC capital $ 18.373 $ (412) 322 $ 17. 2012 Year ended June 30.713 $ 1.032 $ 610 (756) 335 $ 16. 2011 Year ended June 30.030) 1.579 1.030) 3 20.018 608 31 46 (8) 22. 2013 (US$ millions) Attributable to IFC Accumulated other comprehensive Total income retained Note O earnings $ 14.328 (1.328 (1.579 341 $ 1.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
for each of the three years ended June 30, 2013 (US$ millions)
2013 (6,940) (2,549) (523) 5,321 377 1,502 35 (2,777) $ 2012 (5,651) (1,810) (520) 3,733 231 10 2,452 56 (1,499) $ 2011 (4,519) (1,884) (312) 3,297 72 26 1,433 12 (1,875)

Cash flows from investing activities Loan disbursements ................................................................................................. $ Investments in equity securities ................................................................................ Investments in debt securities .................................................................................. Loan repayments ..................................................................................................... Debt securities repayments ..................................................................................... Proceeds from sales of loans.................................................................................... Proceeds from sales of equity investments .............................................................. Proceeds from sales of debt securities .................................................................... Net cash used in investing activities ............................................................ Cash flows from financing activities Medium and long-term borrowings New issues ........................................................................................................... Retirement ............................................................................................................ Medium and long-term borrowings related derivatives, net .................................. Short-term borrowings, net ....................................................................................... Capital subscriptions ................................................................................................. Noncontrolling interests issued ................................................................................. Net cash provided by financing activities ................................................... Cash flows from operating activities Net income attributable to IFC .................................................................................. Add: Net loss attributable to noncontrolling interests ................................................ Net income ............................................................................................................... Adjustments to reconcile net income to net cash used in operating activities: Gains on non-monetary exchanges of loans ........................................................ Realized gains on debt securities and gains on non-monetary exchanges.......... Realized gains on equity investments and gains on non-monetary exchanges ... Unrealized (gains) losses on loans accounted for at fair value ............................ Unrealized losses (gains) on debt securities accounted for at fair value … ......... Unrealized (gains) losses on equity investments ................................................. Provision (release of provision) for losses on loans and guarantees ................... Other-than-temporary impairments on debt securities ......................................... Other-than-temporary impairments on equity investments................................... Net discounts paid on retirement of borrowings………………………………….. .. Net realized gains on extinguishment of borrowings ............................................ Foreign currency transaction (gains) losses on non-trading activities .................. Net (gains) losses on other non-trading financial instruments accounted for at fair value ................................................................................ Change in accrued income on loans, time deposits and securities ..................... Change in payables and other liabilities .............................................................. Change in receivables and other assets .............................................................. Change in trading securities and securities purchased and sold under resale and repurchase agreements .................................................................. Net cash used in operating activities .......................................................... Change in cash and cash equivalents ......................................................................... Effect of exchange rate changes on cash and cash equivalents ................................. Net change in cash and cash equivalents ................................................................... Beginning cash and cash equivalents .......................................................................... Ending cash and cash equivalents .......................................................................... $ Composition of cash and cash equivalents Cash and due from banks ......................................................................................... $ Time deposits ........................................................................................................... Total cash and cash equivalents .......................................................................... $

12,718 (9,481) 401 (337) 31 46 3,378 1,018 (8) 1,010 (20) (17) (927) (35) 39 (26) 243 46 441 (2) (11) (35) (422) 18 (666) 696 (1,800) (1,468) (867) 325 (542) 7,047 6,505 616 5,889 6,505 $ $ $

11,636 (5,182) 329 (49) 3 6,737 1,328 1,328 (78) (13) (2,003) 57 (21) 128 117 27 692 (1) (19) (145) 219 (48) 1,171 (331) (5,211) (4,131) 1,107 473 1,580 5,467 7,047 1,328 5,719 7,047 $ $ $

9,882 (5,139) 410 43 5,196 1,579 1,579 (9) (2) (954) (79) 2 (454) (40) 2 218 (3) (10) 33 (155) 51 354 138 (4,722) (4,051) (730) 234 (496) 5,963 5,467 642 4,825 5,467

The notes to the Consolidated Financial Statements are an integral part of these statements

INTERNATIONAL FINANCE CORPORATION

Page 48

_ 41

CONSOLIDATED STATEMENTS OF CASH FLOWS
for each of the three years ended June 30, 2013 (US$ millions)
2013 Supplemental disclosure Change in ending balances resulting from currency exchange rate fluctuations: Loans outstanding ............................................................................................... $ Debt securities ..................................................................................................... Loan and debt security-related currency swaps .................................................. Borrowings ............................................................................................................ Borrowing-related currency swaps ...................................................................... Client risk management-related currency swaps .................................................. Charges on borrowings paid, net .............................................................................. $ Non-cash items: Loan and debt securities conversion to equity, net .............................................. $ Increase in net assets due to exchange, recorded at fair value, of equity investment for non-cash asset ........................................................... $ 21 (19) 63 1,868 (1,876) 277 77 217 $ (675) (221) 915 1,282 (1,275) 139 90 $ 601 142 (699) (2,358) 2,327 (6) 159 75 2012 2011

$ $ $

$ $ $

The notes to the Consolidated Financial Statements are an integral part of these statements

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CONSOLIDATED STATEMENT OF CAPITAL STOCK AND VOTING POWER
as of June 30, 2013 (US$ thousands)
Members Afghanistan ............................. Albania .................................... Algeria ..................................... Angola ..................................... Antigua and Barbuda .............. Argentina ................................. Armenia ................................... Australia .................................. Austria ..................................... Azerbaijan ............................... Bahamas, The ………………... Bahrain ………………………… Bangladesh …………………… Barbados ……………………… Belarus .................................... Belgium ................................... Belize ...................................... Benin …………………………... Bhutan …………………………. Bolivia …………………………. Bosnia and Herzegovina ……. Botswana ……………………… Brazil …………………………... Bulgaria ……………………….. Burkina Faso ........................... Burundi .................................... Cambodia ................................ Cameroon ............................... Canada ………………………... Cape Verde …………………… Central African Republic ……. Chad …………………………… Chile …………………………… China ………………………….. Colombia ……………………… Comoros ………………………. Congo, Dem. Rep. of ……….. Congo, Republic of …………... Costa Rica .............................. Côte d'Ivoire ............................ Croatia .................................... Cyprus …………………………. Czech Republic ………………. Denmark ………………………. Djibouti ………………………… Dominica ................................. Dominican Republic ................ Ecuador ................................... Egypt, Arab Republic of .......... El Salvador .............................. Equatorial Guinea ................... Eritrea ..................................... Estonia .................................... Ethiopia ………………………... Fiji ……………………………… Finland ………………………… France …………………………. Gabon …………………………. Gambia, The ………………….. Georgia ………………………... Germany ………………………. Ghana …………………………. Greece .................................... Grenada .................................. Guatemala .............................. Guinea .................................... Guinea-Bissau ........................ Guyana ………………………... Haiti ……………………………. Honduras ……………………… Hungary ………………………. Iceland ………………………… India ……………………………. Indonesia ……………………… Iran, Islamic Republic of …….. Iraq …………………………….. Ireland …………………………. Israel …………………………… Italy ……………………………. Jamaica ……………………….. Japan ………………………….. Jordan …………………………. Kazakhstan …………………… Kenya …………………………. Kiribati ………………………… Korea, Republic of …………… Kosovo ………………………… Kuwait …………………………. Kyrgyz Republic ……………… Lao People's Dem. Rep. …….. Latvia ………………………….. Lebanon ……………………….. Capital Stock Amount Percent paid of total 111 * 1,302 0.05 5,621 0.23 1,481 0.06 13 * 38,129 1.59 992 0.04 47,329 1.97 19,741 0.82 2,367 0.1 335 0.01 1,746 0.07 9,037 0.38 361 0.02 5,162 0.21 50,610 2.11 101 * 119 * 720 0.03 1,902 0.08 620 0.03 113 * 39,479 1.64 4,867 0.2 836 0.03 100 * 339 0.01 885 0.04 81,342 3.38 15 * 119 * 1,364 0.06 11,710 0.49 43,047 1.79 12,606 0.52 14 * 2,159 0.09 131 0.01 952 0.04 3,544 0.15 2,882 0.12 2,139 0.09 8,913 0.37 18,554 0.77 21 * 42 * 1,187 0.05 2,161 0.09 12,360 0.51 29 * 43 * 935 0.04 1,434 0.06 127 0.01 287 0.01 15,697 0.65 121,015 5.04 1,268 0.05 94 * 1,380 0.06 128,908 5.36 5,071 0.21 6,898 0.29 74 * 1,084 0.05 339 0.01 18 * 1,392 0.06 822 0.03 495 0.02 10,932 0.45 42 * 81,342 3.38 29,384 1.22 1,444 0.06 147 0.01 1,290 0.05 2,135 0.09 81,342 3.38 4,282 0.18 141,174 5.87 941 0.04 4,637 0.19 4,041 0.17 12 * 22,020 0.92 1,454 0.06 9,947 0.41 1,720 0.07 278 0.01 2,150 0.09 135 0.01 Voting Power Number of Percent of total votes 878 0.03 2,069 0.08 6,388 0.25 2,248 0.09 780 0.03 38,896 1.53 1,759 0.07 48,096 1.89 20,508 0.81 3,134 0.12 1,102 0.04 2,513 0.1 9,804 0.39 1,128 0.04 5,929 0.23 51,377 2.02 868 0.03 886 0.03 1,487 0.06 2,669 0.1 1,387 0.05 880 0.03 40,246 1.58 5,634 0.22 1,603 0.06 867 0.03 1,106 0.04 1,652 0.06 82,109 3.23 782 0.03 886 0.03 2,131 0.08 12,477 0.49 43,814 1.72 13,373 0.53 781 0.03 2,926 0.12 898 0.04 1,719 0.07 4,311 0.17 3,649 0.14 2,906 0.11 9,680 0.38 19,321 0.76 788 0.03 809 0.03 1,954 0.08 2,928 0.12 13,127 0.52 796 0.03 810 0.03 1,702 0.07 2,201 0.09 894 0.04 1,054 0.04 16,464 0.65 121,782 4.79 2,035 0.08 861 0.03 2,147 0.08 129,675 5.1 5,838 0.23 7,665 0.3 841 0.03 1,851 0.07 1,106 0.04 785 0.03 2,159 0.08 1,589 0.06 1,262 0.05 11,699 0.46 809 0.03 82,109 3.23 30,151 1.19 2,211 0.09 914 0.04 2,057 0.08 2,902 0.11 82,109 3.23 5,049 0.2 141,941 5.58 1,708 0.07 5,404 0.21 4,808 0.19 779 0.03 22,787 0.9 2,221 0.09 10,714 0.42 2,487 0.1 1,045 0.04 2,917 0.11 902 0.04 Capital Stock Amount Percent paid of total 71 * 83 * 55 * 2,341 0.1 2,139 0.09 536 0.02 432 0.02 1,822 0.08 15,222 0.63 16 * 451 0.02 1,615 0.07 663 0.03 214 0.01 1,665 0.07 27,589 1.15 744 0.03 1,192 0.05 144 0.01 1,035 0.04 9,632 0.4 322 0.01 666 0.03 404 0.02 822 0.03 56,131 2.34 3,583 0.15 715 0.03 147 0.01 21,643 0.9 17,599 0.73 1,187 0.05 19,380 0.81 25 * 1,007 0.04 1,147 0.05 436 0.02 6,898 0.29 13,653 0.57 7,236 0.3 8,324 0.35 1,650 0.07 2,661 0.11 81,342 3.38 306 0.01 35 * 439 0.02 30,062 1.25 2,299 0.1 1,803 0.08 27 * 223 0.01 177 0.01 4,457 0.19 1,585 0.07 37 * 83 * 17,418 0.72 1,880 0.08 37,026 1.54 7,135 0.3 638 0.03 74 * 111 * 620 0.03 684 0.03 26,876 1.12 44,063 1.83 194 0.01 1,212 0.05 1,003 0.04 11,201 0.47 777 0.03 808 0.03 34 * 4,112 0.17 3,566 0.15 14,545 0.61 810 0.03 735 0.03 9,505 0.4 4,033 0.17 121,015 5.04 569,379 23.69 3,569 0.15 3,873 0.16 55 * 27,588 1.15 446 0.02 715 0.03 1,286 0.05 2,120 0.09 2,403,217 100.00+ 2,371,896 100.00+ Voting Power Number of Percent votes of total 838 0.03 850 0.03 822 0.03 3,108 0.12 2,906 0.11 1,303 0.05 1,199 0.05 2,589 0.1 15,989 0.63 783 0.03 1,218 0.05 2,382 0.09 1,430 0.06 981 0.04 2,432 0.1 28,356 1.11 1,511 0.06 1,959 0.08 911 0.04 1,802 0.07 10,399 0.41 1,089 0.04 1,433 0.06 1,171 0.05 1,589 0.06 56,898 2.24 4,350 0.17 1,482 0.06 914 0.04 22,410 0.88 18,366 0.72 1,954 0.08 20,147 0.79 792 0.03 1,774 0.07 1,914 0.08 1,203 0.05 7,665 0.3 14,420 0.57 8,003 0.31 9,091 0.36 2,417 0.09 3,428 0.13 82,109 3.23 1,073 0.04 802 0.03 1,206 0.05 30,829 1.21 3,066 0.12 2,570 0.1 794 0.03 990 0.04 944 0.04 5,224 0.21 2,352 0.09 804 0.03 850 0.03 18,185 0.71 2,647 0.1 37,793 1.49 7,902 0.31 1,405 0.06 841 0.03 878 0.03 1,387 0.05 1,451 0.06 27,643 1.09 44,830 1.76 961 0.04 1,979 0.08 1,770 0.07 11,968 0.47 1,544 0.06 1,575 0.06 801 0.03 4,879 0.19 4,333 0.17 15,312 0.6 1,577 0.06 1,502 0.06 10,272 0.4 4,800 0.19 121,782 4.79 570,146 22.41 4,336 0.17 4,640 0.18 822 0.03 28,355 1.11 1,213 0.05 1,482 0.06 2,053 0.08 2,887 0.11 2,544,345 100.00+ 2,511,184 100.00+

* Less than .005 percent + May differ from the sum of the individual percentages shown because of rounding

Members Lesotho ………………………... Liberia …………………………. Libya …………………………… Lithuania ………………………. Luxembourg…………………… Macedonia, FYR of …………... Madagascar …………………... Malawi …………………………. Malaysia ………………………. Maldives ………………………. Mali …………………………….. Malta …………………………… Marshall Islands ……………… Mauritania …………………….. Mauritius ………………………. Mexico …………………………. Micronesia, Fed. States of…… Moldova ……………………….. Mongolia ………………………. Montenegro …………………… Morocco ……………………….. Mozambique ………………….. Myanmar ………………………. Namibia ……………………….. Nepal …………………………... Netherlands …………………… New Zealand ………………….. Nicaragua ……………………... Niger …………………………… Nigeria …………………………. Norway ………………………… Oman ………………………….. Pakistan ……………………….. Palau …………………………... Panama ……………………….. Papua New Guinea ………….. Paraguay ……………………… Peru ……………………………. Philippines …………………….. Poland …………………………. Portugal ……………………….. Qatar …………………………... Romania ………………………. Russian Federation ………….. Rwanda ……………………….. Samoa …………………………. Sao Tome and Principe ……… Saudi Arabia ………………….. Senegal ……………………….. Serbia ………………………….. Seychelles …………………….. Sierra Leone ………………….. Singapore ……………………... Slovak Republic ………………. Slovenia ……………………….. Solomon Islands ……………… Somalia ………………………... South Africa …………………… South Sudan ………………….. Spain …………………………... Sri Lanka ……………………… St. Kitts and Nevis …………… St. Lucia ……………………….. Sudan ………………………….. Suriname ……………………… Swaziland ……………………... Sweden ………………………... Switzerland ……………………. Syrian Arab Republic ………… Tajikistan ……………………… Tanzania ………………………. Thailand ……………………….. Timor-Leste …………………… Togo …………………………… Tonga ………………………….. Trinidad and Tobago ………… Tunisia ………………………… Turkey …………………………. Turkmenistan …………………. Uganda ………………………... Ukraine ………………………… United Arab Emirates ………... United Kingdom ………………. United States …………………. Uruguay ……………………….. Uzbekistan ……………………. Vanuatu ……………………….. Venezuela, Rep. Boliv. de ….. Vietnam ……………………….. Yemen, Republic of ………….. Zambia ………………………… Zimbabwe …………………….. Total June 30, 2013 Total June 30, 2012

The notes to the Consolidated Financial Statements are an integral part of these statements

consolidated subsidiaries). which also comprises the International Bank for Reconstruction and Development (IBRD). Actual results could differ from these estimates. non-controlling interests and variable interest entities – IFC consolidates: i) all majority-owned subsidiaries. 2012. debt securities. estimated fair values of financial instruments accounted for at fair value (including equity investments. projected benefit obligations. Advisory client fees and administration fees are recognized as income when earned. ii) limited partnerships in which it is the general partner. In addition to project finance and mobilization.Page 50 INTERNATIONAL FINANCE CORPORATION _ 43 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS PURPOSE The International Finance Corporation (IFC). IFC uses internal models to determine the fair values of derivative and other financial instruments and the aggregate level of the reserve against losses on loans and impairment of equity investments. Advisory services – Beginning July 1. It raises most of the funds for its investment activities through the issuance of notes. assists in financing the establishment. In the opinion of management. Consolidated Financial Statements presentation – IFC has reclassified certain amounts on the consolidated statement of cash flows for the year ended June 30. 2012 to amend the presentation of certain foreign currency related remeasurements. LLC and other IFC crisis initiatives. IFC’s activities are closely coordinated with and complement the overall development objectives of the other World Bank Group institutions. fair value of pension and other postretirement benefit plan assets. There are inherent risks and uncertainties related to IFC’s operations. A significant degree of judgment has been used in the determination of: the reserve against losses on loans and impairment of debt securities and equity investments. each in the amount of $909 million. an international organization. IFC. IFC is a member of the World Bank Group. partial credit guarantees. It also advises governments on how to create an environment hospitable to the growth of private enterprise and foreign investment. . IFC adopted a new reporting basis for funds received from donors for IFC’s advisory services business and reported advisory services business as a separate segment. the Consolidated Financial Statements reflect all adjustments necessary for the fair presentation of IFC’s financial position and results of operation. The possibility exists that changing economic conditions could have an adverse effect on the financial position of IFC. Changes in estimates resulting from refinements in the assumptions and methodologies incorporated in the models are reflected in net income in the period in which the enhanced models are first applied. IFC undertakes continuous review and respecification of these models with the objective of refining its estimates. The reclassification had the effect of reducing "change in trading securities and securities purchased and sold under resale and repurchase agreements" and increasing "effect of exchange rate changes on cash and cash equivalents" for the year ended June 30. Advisory services expenses are recognized in the period incurred. IFC also plays a catalytic role in mobilizing additional funding from other investors and lenders through parallel loans. IFC’s share capital is provided by its member countries. was established in 1956 to further economic development in its member countries by encouraging the growth of private enterprise. respectively. Such interests and the amount of consolidated net income/loss attributable to those interests are identified within IFC's consolidated balance sheet and consolidated income statement as "non-controlling interest" and "net income attributable to non-controlling interest". NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES The Consolidated Financial Statements include the financial statements of IFC and consolidated subsidiaries as detailed in Note B. securitizations. and net periodic pension income or expense. Funding received for IFC advisory services from governments and other donors are recognized as contribution revenue when the conditions on which they depend are substantially met. consistent with evolving best practices appropriate to its operations. Equity interests in consolidated subsidiaries held by third parties are referred to as non-controlling interests. 2011. equity investments and investments in debt securities where sufficient private capital is not otherwise available on reasonable terms. improvement and expansion of private sector enterprises by making loans. risk sharing facilities. the International Development Association (IDA). The reclassification had no impact on the consolidated balance sheet or the consolidated income statement. Transactions with other World Bank Group members are disclosed in the notes that follow. See Notes T and V. and fund investments through the IFC Asset Management Company. bonds and other debt securities in the international capital markets. and the International Centre for Settlement of Investment Disputes (ICSID). loan participations. loans. Significant intercompany accounts and transactions are eliminated in consolidation. IFC offers an array of financial and technical advisory services to private businesses in the developing world to increase their chances of success. the Multilateral Investment Guarantee Agency (MIGA). together with private investors. Functional currency – IFC’s functional currency is the United States dollar (US dollars or $). Consolidation. loan sales. unless the presumption of control is overcome by certain management participation or other rights held by minority shareholders/limited partners. and iii) variable interest entities (VIEs) for which IFC is deemed to be the VIE's primary beneficiary (together. trading securities and derivative instruments). Use of estimates – The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expense during the reporting periods. Each member is legally and financially independent. The accounting and reporting policies of IFC conform with accounting principles generally accepted in the United States of America (US GAAP).

an asset-backed financing entity. the Fair Value Option is also applied to those loans. leases or other monetary interests in those entities. Financial Instruments (ASC 825 or the Fair Value Option). service contracts. that are not otherwise permitted to be accounted for at fair value under other accounting standards. and iii) the entity is a securitization vehicle.g. Beginning July 1.44 _ Page 51 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS An entity is a VIE if: i) its equity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties. guarantees. and iv) all market borrowings. as well as entities that are required to comply with or operate in accordance with requirements that are similar to those included in Rule 2a-7 of the Investment Company Act of 1940. except for such borrowings having no associated derivative instruments. Measuring at fair value those equity investments that would otherwise require equity method accounting simplifies the accounting and renders a carrying amount on the consolidated balance sheet based on a measure (fair value) that IFC considers superior to equity method accounting. The election to use the Fair Value Option is available when an entity first recognizes a financial asset or liability or upon entering into a firm commitment. loans) b) investments in Limited Liability Partnerships (LLPs). or an entity that was formerly considered a qualifying special purpose entity. Equity securities held by consolidated subsidiaries that are investment companies Pursuant to ASC Topic 946. if IFC would have otherwise been required to apply equity method accounting. 2010. IFC is considered to be the primary beneficiary of a VIE if it has the power to direct the VIE's activities that most significantly impact its economic performance and the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE unless: i) the entity has the attributes of an investment company or for which it is industry practice to account for their assets at fair value through earnings. all other financial interests in the investee (e. ii) its equity investors do not have decision-making rights about the entity's operations. IFC is considered to be the entity's primary beneficiary if it will absorb the majority of the VIE's expected losses or expected residual returns. with unrealized gains and losses reported in earnings. The Fair Value Option IFC has elected the Fair Value Option for the following financial assets and financial liabilities existing at the time of adoption of ASC 825 and subsequently entered into: i) investees in which IFC has significant influence: a) direct investments in securities issued by the investee and. iii) certain hybrid instruments in the investment portfolio.Investment Companies (ASC 946) and ASC Topic 810. ii) direct equity investments representing 20 percent or more ownership but in which IFC does not have significant influence. In those cases. therefore. Financial Services . A variable interest is a contractual. Limited Liability Companies (LLCs) and other investment fund structures that maintain specific ownership accounts and loans or guarantees to such.. Measuring at fair value those borrowings for which the Fair Value Option has been elected mitigates the earnings volatility caused by measuring the borrowings and related derivative differently (in the absence of a designated accounting hedge) without having to apply ASC Topic 815’s. All borrowings for which the Fair Value Option has been elected are associated with existing derivative instruments used to create an economic hedge. establishes a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels and applies to all items measured at fair value. IFC has disbursed loans to certain of such investees. or iii) if its equity investors do not absorb the expected losses or receive the expected returns of the entity proportionally to their voting rights. Derivatives and Hedging (ASC 815) complex hedge accounting requirements. ASC 820 defines fair value. IFC has elected the Fair Value Option for all new equity interests in funds. ii) IFC has an explicit or implicit obligation to fund losses of the entity that could be potentially significant to that entity. including items for which impairment measures are based on fair value. IFC elected the Fair Value Option for equity investments with 20% or more ownership where it does not have significant influence so that the same measurement method (fair value) will be applied to all equity investments with more than 20% ownership. financial liabilities and firm commitments at fair value on an instrument-by-instrument basis. The Fair Value Option was not elected for all borrowings from IBRD and all other market borrowings because such borrowings fund assets with similar characteristics. . ASC 825 permits the measurement of eligible financial assets. equity securities held by consolidated subsidiaries that are investment companies are accounted for at fair value. For the investments that otherwise would require equity method accounting for which the Fair Value Option is elected. Fair Value Option and Fair Value Measurements – IFC has adopted the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 820. IFC has a number of investments in VIEs that it manages and supervises in a manner consistent with other portfolio investments. Fair Value Measurements and Disclosures (ASC 820) and the Fair Value Option subsections of ASC Topic 825. ASC 825 requires the Fair Value Option to also be applied to all eligible financial interests in the same entity. Consolidation. ownership or other interest whose value changes as the fair value of the VIE's net assets change. IFC's variable interests in VIEs arise from financial instruments.

Changes in the valuation allowance are recognized in net income as they occur. Prepayment fees are recorded as income when received in freely convertible currencies. if any. and/or other developmental objectives. Transaction gains and losses are credited or charged to income. certain assetbacked securities. the next highest priority to observable market based inputs or unobservable inputs that are corroborated by market data from independent sources (Level 2) and the lowest priority to unobservable inputs that are not corroborated by market data (Level 3). IFC reports equity investments that are listed in markets that provide readily determinable fair values at fair value.Debt and Equity Securities (ASC 320). Fair value measurements are required to maximize the use of available observable inputs. prepayment speeds. and are not considered to be clearly and closely related to their host loan contracts. Remeasurement of foreign currency transactions – Assets and liabilities not denominated in US dollars. Loan origination fees and direct loan origination costs are deferred and amortized over the estimated life of the originated loan.Page 52 INTERNATIONAL FINANCE CORPORATION _ 45 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair Value Measurements ASC 820 defines fair value as the price that would be received to sell an asset or transfer a liability (i. and the portion of IFC’s borrowings accounted for at fair value not included in Level 1. as well as other relevant economic measures. and certain hard-to-price securities in the liquid assets portfolio. volatility factors. cross-currency swaps. yield curves. If the NAV is not as of IFC’s measurement date. such amortization is determined using the interest method unless the loan is a revolving credit facility in which case amortization is determined using the straight-line method.. fair value measurements are not adjusted for transaction costs. other than those accounted for at fair value. Loans held for sale are carried at the lower of cost or fair value. are expressed in US dollars at the exchange rates prevailing at June 30. Unrealized gains and losses on loans accounted for at fair value under the Fair Value Option are reported in income from loans and guarantees on the consolidated income statement. Level 3 includes equity investments that are not listed in markets that provide readily determinable fair values. other than disbursed equity investments. pursuant to ASC 946. Notwithstanding the following paragraph. It includes IFC’s equity investments. IFC adjusts the most recent NAV. These models consider various assumptions and inputs. The excess. It also includes financial instruments whose fair value is estimated based on price information from independent sources that cannot be corroborated by observable market data. and market borrowings that are listed on exchanges. government issues and money market funds in the liquid assets portfolio. It is IFC’s practice to obtain collateral security such as. Loans – IFC originates loans to facilitate project finance. pursuant to ASC Topic 320. loss severity and current market and contractual pricing for the underlying asset. Level 3 consists of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are non-observable. knowledgeable and willing market participants at the measurement date assuming the transaction occurs in the entity’s principal (or most advantageous) market. including time value. but not limited to. therefore. Revenue recognition on loans – Interest income and commitment fees on loans are recorded as income on an accrual basis. Financial instruments categorized as Level 2 include non-exchange-traded derivatives such as interest rate swaps. IFC estimates the fair value of its investments in private equity funds that do not have readily determinable fair value based on the funds’ net asset values (NAVs) per share as a practical expedient to the extent that a fund reports its investment assets at fair value and has all the attributes of an investment company. Loans are recorded as assets when disbursed. prepayment and conversion features. all loans for which IFC has elected the Fair Value Option. Certain loans originated by IFC contain income participation. an exit price) in an orderly transaction between independent. Fair value must be based on assumptions market participants would use (inputs) in determining the price and measured assuming that market participants act in their economic best interest. 2012. These features are bifurcated and separately accounted for in accordance with ASC 815 if IFC has not elected the Fair Value Option for the loan host contracts and the features meet the definition of a derivative. Under ASC 820. of amortized cost over fair value is accounted for as a valuation allowance. Substantially all of these inputs are observable in the market place. are expressed in US dollars at the prevailing exchange rates at the time of disbursement. can be derived from observable data or are supported by observable levels at which market transactions are executed. restructuring. Certain loans are carried at fair value in accordance with the Fair Value Option as discussed above. . with unrealized gains and losses being reported in other comprehensive income. which are listed in markets that provide readily determinable fair values. Level 1 primarily consists of financial instruments whose values are based on unadjusted quoted market prices. Investments . refinancing. 2013 and June 30.e. default rates. as necessary. mortgages and third-party guarantees. all of IFC’s debt securities in the investment portfolio. to estimate a NAV for the investment that is calculated in a manner consistent with the fair value measurement principles established by ASC 820. Level 2 includes financial instruments that are valued using models and other valuation methodologies. Loans are generally carried at the principal amounts outstanding adjusted for net unamortized loan origination costs and fees. their fair values are determined based on a transaction to sell or transfer the asset or liability on a standalone basis. these features are accounted for as part of their host loan contracts in accordance with IFC’s accounting policies for loans as indicated herein. corporate finance. Otherwise. Income and expenses are recorded based on the rates of exchange prevailing at the time of the transaction. as well as the majority of trading securities in the liquid asset portfolio. Disbursed equity investments. The fair value hierarchy established by ASC 820 gives the highest priority to unadjusted quoted prices in active markets for identical unrestricted assets and liabilities (Level 1).

bankruptcy/reorganization. as a limited partner in LLPs and LLCs. to IFC’s accounting policies and methodologies used to estimate its reserve against loan losses. or misrepresentation in. 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. The reserve against losses on loans reflects management’s estimates of both identified probable losses on individual loans (specific reserves) and probable losses inherent in the portfolio but not specifically identifiable (portfolio reserves). Capital losses are recognized when incurred. as are fully consolidated by IFC. included in the consolidated balance sheet in payables and other liabilities. The cost recovery method is principally applied to IFC's investments in its oil and gas unincorporated joint ventures (UJVs). based on current information and events. Reserve against losses on loans – IFC recognizes impairment on loans not carried at fair value in the consolidated balance sheet through the reserve against losses on loans. controlling. nonperformance under guarantees and support agreements. Unrealized gains and losses on equity investments listed in markets that provide readily determinable fair values which are accounted for as available-for-sale are reported in other comprehensive income.46 _ Page 53 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS IFC does not recognize income on loans where collectability 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. Equity investments – IFC invests primarily for developmental impact. Such capitalized interest is considered in the computation of the reserve against losses on loans in the consolidated balance sheet. 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. Individually impaired loans are measured based on the present value of expected future cash flows to be received. IFC’s share of conditional asset retirement obligations related to investments in UJVs are recorded when the fair value of the obligations can be reasonably estimated. equity securities held by consolidated subsidiaries that are investment companies are accounted for at fair value. adverse local government action and natural disaster. Revenue recognition on equity investments – Equity investments. which are listed in markets that provide readily determinable fair values. There were no changes. Realized gains on the sale or redemption of equity investments are measured against the average cost of the investments sold and are generally recorded as income from equity investments when received. direct equity investments and investments in LLPs and LLCs that maintain ownership accounts in which IFC has significant influence. Information and events. and opacity of. recording a provision or release of provision for losses on loans in net income. breach of contract. such that receipts of freely convertible currencies are first applied to recovery of invested capital and then to income from equity investments. but not limited to. Equity investments are acquired through direct ownership of equity instruments of investees. Notwithstanding the foregoing. the borrower’s financial difficulties. as the presumption of control by the fund manager or the general partner has been overcome. with respect to the borrower and/or the economic and political environment in which it operates. For purposes of providing certain disclosures about IFC’s entire reserve against losses on loans. it is probable that IFC will be unable to collect all amounts due according to the loan’s contractual terms. are accounted for under the cost recovery method. associated with previously written-off loans. during the periods presented herein. A portfolio segment is the level at which the method for estimating the reserve against losses on loans is developed and documented. IFC does not seek to take operational. credit rating downgrade as well as geopolitical conflict. Loans are written-off when IFC has exhausted all possible means of recovery. if any. and credited to income only when the related principal is received. or strategic equity positions within its investees. observable market prices. uninsured and uninsurable risks. are accounted for as available-for-sale securities at fair value with unrealized gains and losses being reported in other comprehensive income in accordance with ASC 320. Direct equity investments in which IFC does not have significant influence and which are not listed in markets that provide readily determinable fair values are carried at cost. less impairment. Reserves against losses are established through a review of individual loans undertaken on a quarterly basis. for which recovery of invested capital is uncertain. commodity price decline. which increases or decreases the reserve against losses on loans. As noted above under “Fair Value Option and Fair Value Measurements”. Unrealized gains and losses on equity investments accounted for at fair value under the Fair Value Option are reported in income from equity investments on the consolidated income statement. by reducing the reserve against losses on loans. Such reductions in the reserve are partially offset by recoveries. IFC considers a loan as impaired when. the risk of correlation or contagion of losses between markets. beginning July 1. The obligations are capitalized and systematically amortized over the estimated economic useful lives. 2010. Unidentified probable losses are the losses incurred at the reporting date that have not yet been specifically identified. financial statements. considered in determining that a loan is impaired include. The determination of identified probable losses represents management’s judgment of the creditworthiness of the borrower. or for loans that are dependent on collateral for repayment. the estimated fair value of the collateral. and/or as an investor in private equity funds. . IFC considers its entire loan portfolio to comprise one portfolio segment. with unrealized gains and losses reported in earnings. direct equity investments representing 20 percent or more ownership but in which IFC does not have significant influence and. Certain equity investments. IFC’s investments in certain private equity funds in which IFC is deemed to have a controlling financial interest. Interest not previously recognized but capitalized as part of a debt restructuring is recorded as deferred income. all new equity interests in funds are accounted for at fair value under the Fair Value Option. financial/economic crisis.

All liabilities associated with guarantees are included in payables and other liabilities.in the fair value of debt securities are included in other comprehensive income. equity. Generally. these features are accounted for in accordance with ASC 815 to the extent they meet the definition of a derivative.subsequent decreases in fair value. Beginning July 1.Page 54 INTERNATIONAL FINANCE CORPORATION _ 47 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Profit participations received on equity investments are recorded when received in freely convertible currencies. based on the estimated probable loss. IFC invests in certain debt securities with conversion features. Guarantees are regarded as called when IFC’s obligation under the guarantee has been invoked. and the equity investment is written down to the impaired value. When the guarantees are called. Guarantees are regarded as issued when IFC commits to the guarantee. Thus.if not an additional other-than-temporary impairment . Certain debt securities are carried at fair value in accordance with the Fair Value Option as discussed above. Dividends received on equity investments through June 30. if not other than temporary impairment. Significant subsequent increases in the expected or actual cash flows previously expected are recognized as a prospective adjustment of the yield. the amount initially recorded for a nonmonetary asset received in exchange for another nonmonetary asset is the fair value of the asset received. also are included in other comprehensive income. failure to pay when payment is due). debt securities or equity shares). and the remainder which is recorded in other comprehensive income. IFC offers partial credit guarantees to clients covering. or debt security) for another financial instrument (i. 2011. or (2) it is more likely than not that IFC will be required to sell the security before recovery. Debt securities – Debt securities in the investment portfolio are classified as available-for-sale and carried at fair value on the consolidated balance sheet with unrealized gains and losses included in accumulated other comprehensive income until realized. The contingent liability associated with the financial guarantee is recognized when it is probable the guarantee will be called and when the amount of guarantee called can be reasonably estimated. Debt securities in the investment portfolio are assessed for impairment each quarter. Subsequent increases and decreases . Realized gains on the sale or redemption of equity investments are measured against the average cost of the investments sold and. if IFC does not intend to sell the security and it is not more likely than not that IFC will be required to sell the security but the security has suffered a credit loss. Impairment of debt securities – In determining whether an unrealized loss on debt securities is other-than-temporary. Guarantees – IFC extends financial guarantee facilities to its clients to provide credit enhancement for their debt securities and trade obligations. the impairment charge will be separated into the credit loss component.e. any changes to the ratings of a security. The difference between the fair value of the asset received and the recorded amount of the asset surrendered (immediately prior to the exchange transaction) is recorded as a gain or loss on non-monetary exchanges in the income statement. Such other than temporary impairments are recognized in net income.. The difference between the new amortized cost basis of debt securities for which an other-than-temporary impairment has been recognized in net income and the cash flows expected to be collected is accreted to interest income using the effective yield method. the amount disbursed is recorded as a new loan. Losses are recognized when incurred. IFC enters into put and call option and warrant agreements in connection with certain equity investments. Realized gains on sales of debt securities and interest on debt securities is included in income from debt securities on the consolidated income statement. or (2) a nonreciprocal transfer where IFC receives a nonmonetary asset for which no assets are relinquished in exchange. Commitment fees on guarantees are recorded as income on an accrual basis.dividends on unlisted equity investments are recorded upon receipt of notice of declaration. the entire impairment is recognized in net income if (1) IFC intends to sell the security.. less impairment and available-for-sale are assessed for impairment each quarter. it is generally deemed to be other than temporary.. . these are accounted for in accordance with ASC 815 to the extent they meet the definition of a derivative. an industry or geographic sector. whether IFC intends to sell the debt security or whether it is more likely than not that IFC will be required to sell the debt security. Guarantee fees are recorded in income as the stand-ready obligation to perform is fulfilled. dividends on listed equity investments are recorded on the ex dividend date . accounting for exchanges of nonmonetary assets should be based on the fair values of the assets involved. When impairment is identified. The fair value of the stand-ready obligation to perform is recognized at the inception of the guarantee unless a contingent liability exists at that time or is expected to exist in the near term. and the receivables are included in other assets on the consolidated balance sheet. When impairment is identified. Guarantees are regarded as outstanding when the underlying financial obligation of the client is incurred. Under the terms of IFC's guarantees. client obligations on bonds or loans.e. IFC agrees to assume responsibility for the client’s financial obligations in the event of default by the client (i. 2011 were recorded as income when received in freely convertible currencies. were recorded as income in income from equity investments when received in freely convertible currencies. Unrealized gains and losses on debt securities accounted for at fair value under the Fair Value Option are reported in income from debt securities on the consolidated income statement. through June 30. IFC considers all relevant information including the length of time and the extent to which fair value has been less than amortized cost. loan. the payment structure of the obligation and the ability of the issuer to make scheduled interest or principal payments. realized gains on listed equity investments are recorded upon trade date . on a risk-sharing basis. There are two liabilities associated with the guarantees: (i) the stand-ready obligation to perform and (ii) the contingent liability. However. and specific reserves against losses are established. Beginning July 1.realized gains on unlisted equity investments are recorded upon incurring the obligation to deliver the applicable shares. The impaired value becomes the new amortized cost basis of the debt security. which becomes the new cost basis in the equity investment. and relevant adverse conditions specifically related to the security. which is recognized in net income. Impairment of equity investments – Equity investments accounted for at cost.e. and this date is considered to be the “inception” of the guarantee. Subsequent increases in the fair value of available-for-sale equity investments are included in other comprehensive income . 2011. 2011. Gains and losses on nonmonetary exchanges – Nonmonetary transactions typically arise through: (1) the exchange of nonmonetary assets by exercising a conversion option that results in the exchange of one financial instrument (i.

within parameters defined in the agreements. cash and cash equivalents) as cash and as cash equivalents in the consolidated statement of cash flows because they are generally readily convertible to known amounts of cash within 90 days of acquisition generally when the original maturities for such instruments are under 90 days or in some cases are under 180 days. Securities and related derivative instruments within IFC’s liquid asset portfolio are classified as trading and are carried at fair value with any changes in fair value reported in income from liquid asset trading activities. additional collateral is obtained when their value declines. in accordance with the terms of the agreements. securities purchased under resale agreements. securities sold under repurchase agreements. 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. including lending. commercial real estate collateralized debt obligations and collateralized loan obligations. related derivative instruments. Under certain outstanding borrowing agreements. requests the return of excess securities held by the counterparty when their value increases. time deposits and asset-backed. IFC borrows in a variety of currencies and uses a number of borrowing structures. including foreign exchange rate-linked. consists of: time deposits and securities. receivables from sales of securities and payables for purchases of securities.48 _ Page 55 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Designations of retained earnings – IFC establishes funding mechanisms for specific Board approved purposes through designations of retained earnings. Investments resulting from such designations are recorded on IFC’s consolidated balance sheet in the year in which they occur. Interest on securities and amortization of premiums and accretion of discounts are also reported in income from liquid asset trading activities. Risk management and use of derivative instruments – IFC enters into transactions in various derivative instruments for financial risk management purposes in connection with its principal business activities. Interest on borrowings and amortization of premiums and accretion of discounts are reported in charges on borrowings. IFC also monitors its exposure with respect to securities sold under repurchase agreements and. investing in debt securities and equity investments. IFC 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. recipients who are deemed to be controlled by IFC make investments. IFC classifies cash and due from banks and time deposits (collectively. consumer. including mortgage-backed. which are primarily liquid government securities. Borrowings – To diversify its access to funding. All other designations are recorded as a transfer from undesignated retained earnings to designated retained earnings when the designation is noted with approval by the Board of Directors. If the recipient is deemed to be controlled by IFC. and contemplating the financial capacity and strategic priorities of IFC. client risk management. Expenditures resulting from such designations are recorded as expenses in IFC’s consolidated income statement in the year in which they are incurred. inverse floating rate and zero coupon notes. borrowing. auto and student loans-backed securities. Substantially all borrowings are carried at fair value under the Fair Value Option with changes in fair value reported in net gains and losses on other non-trading financial instruments accounted for at fair value in the consolidated income statement. Asset-backed and mortgage-backed securities include agency and non-agency residential mortgage-backed securities. Designations of retained earnings for grants to IDA are recorded as a transfer from undesignated retained earnings to designated retained earnings when the designation is approved by the Board of Governors. Total designations of retained earnings are determined based on IFC’s annual income before expenditures against designated retained earnings and net gains and losses on other non-trading financial instruments accounted for at fair value in excess of $150 million. and other obligations issued or unconditionally guaranteed by governments of countries or other official entities including government agencies and instrumentalities or by multilateral organizations. IFC’s liquid funds are invested in government. agency and governmentsponsored agency obligations. and reduce its borrowing costs. The market value of these securities is monitored and. 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. also having the effect of reducing the respective designated retained earnings for such purposes. or cash flows. Gains and losses realized on the sale of trading securities are computed on a specific security basis. securities. There are no derivatives designated as accounting hedges. IFC simultaneously converts such borrowings into variable rate US dollar borrowings through the use of currency and interest rate swap transactions. These investments have had no material impact on IFC’s financial position. IFC includes those assets on its consolidated balance sheet until the recipient disposes of or transfers the asset or IFC is deemed to no longer be in control of the recipient. In such cases. Expenditures are deemed to have been incurred when IFC has ceded control of the funds to the recipient. and related accrued income and charges. results of operations. On occasion. notes. also having the effect of reducing the respective designated retained earnings for such purposes. Liquid asset portfolio – The liquid asset portfolio. bills. commercial mortgage-backed securities. 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. as defined by IFC. It is IFC’s policy to take possession of securities purchased under resale agreements. the expenditure is deemed to have been incurred only when the recipient disburses the funds to a non-related party. Government and agency obligations include positions in high quality fixed rate bonds. Generally. liquid asset portfolio management and asset and liability management. .

IFC includes a receivable from IBRD in receivables and other assets. or borrowings with principal and/or interest determined by reference to a specified index such as a stock market index. exceeds a specified level. Liquid asset portfolio management activities IFC manages the interest rate. In addition. The risk management policy for each of IFC’s principal business activities and the accounting policies particular to them are described below. To hedge the market risks that arise from these transactions with clients. IFC. which. without recourse. or one or more foreign exchange rates. These structures include borrowings payable in multiple currencies. 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. with the related secured borrowings included in payables and other liabilities on IFC’s consolidated balance sheet. and MIGA based upon their employees’ respective participation in the plans. Changes in fair value of all derivatives associated with these activities are reported in net income in net gains and losses on other non-trading financial instruments accounted for at fair value. certain derivative instruments embedded in loans. prepayments and re-schedulings. Derivative instruments are used to convert the cash flows from fixed rate US dollar or non-US dollar loans into variable rate US dollars. and developing member countries’ capital markets. All costs associated with these plans are allocated between IBRD. The disbursed and outstanding balances of loan participations that meet the applicable accounting criteria are accounted for as sales and are not included in IFC’s consolidated balance sheet. IFC has entered into master agreements governing derivative transactions that contain close-out and netting provisions and collateral arrangements. The derivative instruments used include short-term. debt securities and equity investments are bifurcated from the host contract and recorded at fair value as derivative assets and liabilities. and maturity of its loans and borrowings. diversifying funding sources. consistent with IFC’s matched funding policy. Changes in the fair value of such borrowings and the associated derivatives are reported in net gains and losses on other non-trading financial instruments accounted for at fair value in the consolidated income statement. . Interest rate risk arising from mismatches due to write-downs. Loan participations – IFC mobilizes funds from commercial banks and other financial institutions (Participants) by facilitating loan participations. all market borrowings for which a derivative instrument is used to create an economic hedge. to convert such borrowings into variable rate US dollar obligations. IFC and MIGA reimburse IBRD for their share of any contributions made to these plans by IBRD. IFC enters into offsetting derivative transactions with matching terms with authorized market counterparties. Lending activities IFC’s policy is to closely match the currency. The RSBP provides certain health and life insurance benefits to eligible retirees. 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 IFC and of MIGA. Changes in fair values of derivative instruments other than those in the liquid asset portfolio are recorded in net gains and losses on other non-trading financial instruments accounted for at fair value. IFC elected to carry at fair value. Residual currency risk is managed by monitoring the aggregate position in each lending currency and reducing the net excess asset or liability position through sales or purchases of currency. primarily currency and interest rate swaps. the counterparty must post collateral to cover the excess. generally in the form of liquid government securities or cash. IFC uses derivative instruments with matching terms. The fair value at inception of such embedded derivatives is excluded from the carrying amount of the host contracts on the consolidated balance sheet. credit risk is managed by establishing exposure limits based on the credit rating and size of the individual counterparty. 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. In addition. As the entire liquid asset portfolio is classified as a trading portfolio. in turn. No derivatives in the liquid asset portfolio have been designated as hedging instruments under ASC 815. Where they are not clearly and closely related to the host contract. In respect of liquid assets and derivatives transactions. or commodity risk. and exchange-traded interest rate futures and options.Page 56 INTERNATIONAL FINANCE CORPORATION _ 49 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS All derivative instruments are recorded on the consolidated balance sheet at fair value as derivative assets or derivative liabilities. Client risk management activities IFC enters into derivatives transactions with its clients to help them hedge their own currency. all securities (including derivatives) are carried at fair value with changes in fair value reported in income from liquid asset trading activities. interest rate and currency swaps. under the Fair Value Option. The SRP provides regular pension benefits and includes a cash balance plan. over-the-counter foreign exchange forwards (covered forwards). interest rate. The PEBP provides pension benefits administered outside the SRP. IFC does not offset the fair value amounts of derivatives and obligations to return cash collateral associated with these masternetting agreements. IFC has elected not to designate any hedging relationships for any of its lending-related derivatives. All other loan participations are accounted for as secured borrowings and are included in loans on IFC’s consolidated balance sheet. Changes in fair values of derivative instruments used in the liquid asset portfolio are recorded in income from liquid asset trading activities. sometimes using complex structures. consistent with IFC’s matched funding policy. IFC monitors the credit risk associated with these activities by careful assessment and monitoring of prospective and actual clients and counterparties. if IFC’s credit exposure to a counterparty. on a mark-tomarket basis. interest rate basis. representing prepaid pension and other postretirement benefit costs. improves the overall quality of IFC’s loan portfolio. Under these agreements. Borrowing activities IFC issues debt securities in various capital markets with the objectives of minimizing its borrowing costs. Pension and other postretirement benefits – IBRD has a defined benefit Staff Retirement Plan (SRP). The net periodic pension and other postretirement benefit income or expense allocated to IFC is included in income or expense from pension and other postretirement benefit plans in the consolidated income statement. a reference interest rate. Asset and liability management In addition to the risk managed in the context of its business activities detailed above. These loan participations are administered and serviced by IFC on behalf of the Participants. a commodity index. IFC faces residual market risk in its overall asset and liability management.

as appropriate. introduces new disclosure requirements applicable to investment companies. beginning after December 15. 2012 (which is the year ending June 30. 2012 for IFC) and interim and annual periods thereafter. 2012 for IFC). In December 2011. IFC analyzed and implemented the new guidance. and interim periods within those annual periods. beginning after December 15. Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). the FASB issued ASU 2013-02. . does not require any additional disclosures and is effective for fiscal years ending after December 15. repurchase and reverse repurchase (resale) agreements and securities lending transactions that are either offset in accordance with ASC 210-20-45 or ASC 815-10-45 or subject to a master netting arrangement or similar agreement. Deferral of the Effective date for Amendments to the Presentation of reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. The new disclosures will also provide information about both gross and net exposures. respectively. 2011-05 (ASU 2011-12). 2014 for IFC). 2011 (which was the year ended June 30. and ASU 2011-12. It does not amend any existing reporting requirements for measuring net income or other comprehensive income.S. ASU 2011-11 is effective for annual reporting periods. respectively. entities. ASU 2011-05 is effective for annual reporting periods. ASU 2013-02 requires disclosure of information about changes in AOCI balances by component and significant items reclassified out of AOCI. Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 201302). 2014 for IFC). no impact on IFC has been determined as of June 30. the FASB issued ASU 2011-05. ASU 2013-01 clarifies that instruments within ASC 2011-11’s scope are limited to derivatives. In June 2013. ASU 2011-11 contains new disclosure requirements regarding the reporting entity’s rights of setoff and related arrangements associated with its financial instruments and derivatives. and interim periods within those annual periods. financial regulatory system by introducing new regulators and extending regulation over new markets. In February 2013. 2013 (which is the year ending June 30. with no material impact on the financial position. In January 2013. Accounting and financial reporting developments – In July 2010. Investment Companies (Topic 946). 2013. 2011 (which was the year ended June 30. results of operations or cash flows of IFC. 2015 for IFC). IFC currently presents two separate but consecutive consolidated statements of income and comprehensive income. the FASB issued and/or approved various other ASUs. beginning after December 15. and activities. Pending the development of these rules. Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). Measurement and Disclosure Requirements (ASU 2013-08). Amendments to the Scope. ASU 2013-02 is effective for annual reporting periods. and interim periods within those annual periods. and must be applied retroactively. Among other things. The Act seeks to reform the U. The implementation of the Act is dependent on the development of various rules to clarify and interpret its requirements. 2013 (which is the year ending June 30. IFC continues to evaluate the potential future implications of the Act. the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) became law. the FASB issued ASU 2011-11. during the year ended June 30. IFC is currently evaluating the impact of ASU 2013-08. Presentation of Comprehensive Income (ASU 201105). In addition. ASU 2011-05 does not change the items that must be reported in other comprehensive income. ASU 2013-08 amends the criteria for an entity to qualify as an investment company under ASC Topic 946. ASU 2013-08 is applicable for annual reporting periods and interim periods within those annual periods.50 _ Page 57 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Recently adopted accounting standards – In June 2011. the FASB issued ASU 2013-08. 2013. and amends the measurement criteria for certain investments by an investment company in another investment company. ASU 2011-05 revises the manner in which entities must present comprehensive income in their financial statements by requiring either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements of income and comprehensive income. beginning on or after January 1. the FASB issued ASU 2013-01.

2011).year ended June 30. seeks to mobilize capital from outside IFC’s traditional investor pool and to manage third-party capital. As a result of the consolidation of AMC.year ended June 30. 2013. Hilal Sukuk Company is a VIE and has been consolidated into these Consolidated Financial Statements. AMC is consolidated into IFC’s financial statements. LP. IFC Catalyst Fund).June 30. 2012 and $28 million . IFC does not have an ownership interest in the IFC Catalyst Fund (UK). which is comprised of IFC Catalyst Fund.June 30. 2012). Latin American and Caribbean Fund. 2013 ($10 million . All AMC Funds are investment companies and are required to report their investment assets at fair value through net income.year ended June 30. IFC African. These noncontrolling interests meet the ASC's definition of mandatorily redeemable financial instruments because the terms of the underlying partnership agreement provide for a termination date at which time its remaining assets are to be sold. except for IFC Russian Bank Capitalization Fund. The collective impact of this and other entities consolidated into these Consolidated Financial Statements under the VIE or voting interest model is insignificant. receivables and other assets ($12 million . IFC created a special purpose vehicle.Page 58 INTERNATIONAL FINANCE CORPORATION _ 51 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE B – SCOPE OF CONSOLIDATION IFC Asset Management Company. 2011) and other expenses includes $11 million during the year ended June 30.P. the settlement value or estimate of cash that would be due and payable to settle these noncontrolling interests. At June 30. therefore. The Sukuk is scheduled to mature in November 2014. AMC. LLC (AMC) and AMC Funds IFC through its wholly owned subsidiary. Hilal Sukuk Company.June 30.P. IFC has provided $2 million of capital to AMC ($2 million . LP (*) 20% The ownership interest of 27% reflects IFC’s ownership interest taking into consideration the overall commitments for the IFC Catalyst Fund. IFC’s investments in AMC Funds. LP (collectively. its liabilities settled and the remaining net proceeds distributed to the noncontrolling interest holders and IFC. 2012) and $1 million in payables and other liabilities ($2 million . 2012). 2012). 2012 and $5 million . 2012). 2013. L. LP Africa Capitalization Fund. IFC’s ownership interests in these AMC Funds are shown in the following table: AMC Fund IFC Capitalization (Equity) Fund.June 30. 2013. albeit with no material impact. IFC Russian Bank Capitalization Fund. less than $0. its investment securities (equity investments) are measured at fair value in IFC's consolidated balance sheet. As RBCF is considered an investment company. Other income in IFC’s consolidated income statement includes $40 million during the year ended June 30. IFC’s consolidated balance sheet at June 30. 2013 includes $18 million in cash. L. 2012). AMC managed seven funds (collectively referred to as the AMC Funds). approximates the $38 million of noncontrolling interests reflected on IFC's consolidated balance sheet at June 30. to facilitate a $100 million Sukuk under IFC’s borrowings program. IFC’s consolidated balance sheet at June 30.5 million . LP (RBCF). As a result of consolidating RBCF.June 30. assuming an orderly liquidation of RBCF on June 30. created in June 2012. LP IFC Catalyst Funds (*) IFC’s ownership interest 61% 13% 20% 45% 27% (*) IFC Global Infrastructure Fund. 2013 ($28 million . . RBCF's termination date is 2021 with a possible extension to 2023. and noncontrolling interests of $38 million ($0 .June 30. 2013.year ended June 30. is consolidated into IFC’s financial statements because of the presumption of control by IFC as owner of the general partner of RBCF. Other Consolidated entities In October 2009. are accounted for at fair value under the Fair Value Option. Ltd. RBCF.5 million in equity investments (less than $0. 2013 includes $74 million of equity investments ($0 . IFC Capitalization (Subordinated Debt) Fund. LP and IFC Catalyst Fund (UK). At June 30.

$159 million gains . June 30.year ended June 30. during the year ended June 30.6% (1.June 30. net of the effect of associated derivative instruments that convert non-US dollar securities into US dollar securities.400 million . Collateral The estimated fair value of securities held by IFC at June 30. represent 2. Composition of liquid asset portfolio The composition of IFC’s liquid asset portfolio included in the consolidated balance sheet captions is as follows (US$ millions): Assets Cash and due from banks Time deposits Trading securities Securities purchased under resale agreements Derivative assets Receivables and other assets: Receivables from unsettled security trades Accrued interest income on time deposits and securities Accrued income on derivative instruments Total assets Liabilities Securities sold under repurchase agreements Derivative liabilities Payables and other liabilities: Payables for unsettled security trades Accrued charges on derivative instruments Total liabilities Total net liquid asset portfolio $ June 30.736 210 179 46 6. 2013 as collateral in connection with derivatives transactions and purchase and resale agreements that may be sold or repledged was $1. 2012).52 _ Page 59 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE C – LIQUID ASSET PORTFOLIO Income from liquid asset trading activities Income from the liquid asset trading activities for the years ended June 30.889 30.317 million ($1.year ended June 30.7% .June 30. The annualized rate of return on the trading liquid asset portfolio.year ended June 30. $103 million losses . calculated as total income from the liquid asset trading activities divided by fair value average daily balance of total trading securities. 2. trading securities with a carrying amount (fair value) of $205 million ($210 million . . 2011). 2012).June 30. 2011 comprises (US$ millions): Interest income Net gains and losses on trading activities: Realized losses Unrealized gains (losses) Net gains (losses) on trading activities Total income from liquid asset trading activities $ $ 2013 430 (103) 173 70 500 $ $ 2012 670 (70) (287) (357) 313 $ $ 2011 473 (76) 132 56 529 Net gains and losses on trading activities comprises net gains on asset-backed and mortgage-backed securities of $161 million in the year ended June 30. 2013 (2.349 337 376 236 135 21 37. Collateral given by IFC to counterparties in connection with repurchase agreements that may be sold or repledged by the counterparty approximates the amounts classified as Securities sold under repurchase agreements. 2011).408 5.038 28. investments in other currencies.2% . 2013.868 964 264 691 123 20 36. 2013 $ 65 5. 2013 ($349 million losses . 2013 ($8 million losses . 2012 $ 883 5.387 million . 2013.130 29.851 6.year ended June 30. After the effect of associated derivative instruments. 2011) and net losses on other trading securities of $91 million in the year ended June 30.7% of the portfolio at June 30. 2012).year ended June 30. the liquid asset portfolio generally reprices within one year.June 30. 2012. 2013.721 The liquid asset portfolio is denominated primarily in US dollars.1% year ended June 30.029 million ($3.171 31.237 $ June 30. was 1.397 223 477 33 7. 2012 and June 30. the carrying amount of which was $1. 2012. At June 30. 2012. 2012) were pledged in connection with borrowings under a short-term discount note program.

295 43 493 20.916 . $210 .889 .438 * Equity investments at cost less impairment at June 30.423 Government.381) 18.6 768 n/a $ 30. $2.464 463 $ 30. $1.911 240 2. 2013 and June 30.June 30. 2012 comprises (US$ millions): Loans Loans at amortized cost Less: Reserve against losses on loans Net loans Loans held for sale at lower of amortized cost or fair value Loans accounted for at fair value under the Fair Value Option (outstanding principal balance $474 . due to prepayment features.230 4.151 34.June 30.927 8.923 (1.June 30.458 2.June 30. 2013 includes unrealized gains of $2 million ($2 million . 2013.868 The expected maturity of the asset-backed securities may be significantly shorter than the contractual maturity.477 9.346 11. 2013.1 9. 2013 Weighted average Fair value contractual (US$ millions) maturity (years) $ 14. agency and government-sponsored agency obligations Asset-backed securities Corporate securities Money market funds Total trading securities At June 30.6 8. 2012 Fair value average daily balance (US$ million) $ 11.823 2. 2013.047 2.831 3.June 30.June 30.397 . 2012) related to equity investments accounted for as available-for-sale in previous periods and for which readily determinable fair vales are no longer available.Page 60 INTERNATIONAL FINANCE CORPORATION _ 53 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Trading securities Trading securities comprises: Year ended June 30.367 7.6 6.695 $ June 30.697 . .677 $ 1.9 6.496 3. 2012) Equity investments accounted for at fair value (cost $3.June 30. 2013 Fair value average daily balance (US$ million) $ 14.119 4.June 30.076 17.628) 20. 2012) Debt securities accounted for at fair value under the Fair Value Option (amortized cost $237 . as reported above.349 Government.916 252 2.634 463 $ 25.226 (1. 2013 $ 21.883 At June 30.252 18.June 30. 2013.066 3. 2012) Total loans Equity investments Equity investments at cost less impairment* Equity investments accounted for at fair value as available-for-sale (cost $2. $607 .2 109 n/a $ 28.June 30.231 3.419 6.684 1. $1.845 60 591 19. 2012) Total equity investments Debt securities Debt securities accounted for at fair value as available-for-sale (amortized cost $1. agency and government-sponsored agency obligations Asset-backed securities Corporate securities Money market funds Total trading securities Year ended June 30.168 31.783 .June 30. NOTE D – INVESTMENTS The carrying amount of investments at June 30.636 .774 1. 2012 20. 2013.569 6. 2012 Weighted average Fair value contractual (US$ millions) maturity (years) $ 13. 2012) Total debt securities Total carrying amount of investments $ June 30.

007 2.624 22.766 2.628) (139) (35) 8 1.151 $ 1.742 2.695 $ - (72) 52 (3) (64) 3 (1) 1.078 255 7.338 13.547 $ 201 $ 36 37 274 274 552 682 128 1.542 1. Middle East and North Africa Sub-Saharan Africa.061 302 6.656 494 8.337 2.438 . agribusiness and services Asia $ Europe.381 1.634 9.639 3.348 4.168 $ 1.787 4.198 2.677 $ (16) 19. agribusiness and services Financial markets Asia Europe.639 1.54 _ Page 61 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The distribution of the investment portfolio by industry sector and by geographical region and a reconciliation of total disbursed portfolio to carrying amount of investments is as follows (US$ millions): Sector Manufacturing.348 21.297 2.056 1.098 1.831 $ 78 3 2. 2012 Equity Debt investments securities 385 $ 599 390 1.381) (120) (38) 8 (37) 44 (3) 1.194 414 7.439 7.911 671 34.004 1.526 3.496 $ 31 42 2.636 55 10 130 5 200 2.842 2.448 841 9. Latin America and Caribbean Other Total manufacturing. 2013 Equity Debt investments securities 503 $ 634 473 100 1.479 867 31.815 1. Middle East and North Africa Sub-Saharan Africa.374 615 9.131 1.907 4.660 1.947 615 7.273 3.526 546 4.105 1.987 30.018 8.481 66 66 69 12 213 2.700 (1.110 $ Loans Total 2.564 1.779 3.056 12.734 401 356 448 234 1.796 382 6.287 2.885 (1. Middle East and North Africa Sub-Saharan Africa.774 $ (3) (12) (105) (1) (1) 19 20.710 1.043 $ (1.628) (139) $ $ Loans Total 2.946 $ 3.198 2.833 649 11.070 $ June 30.590 4.702 2.606 $ (1. net and other Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets Adjustments to disbursed investment portfolio Unrealized losses on equity investments held by consolidated VIEs Unrealized gains on investments accounted for at fair value as availablefor-sale Unrealized gains (losses) on investments Carrying amount of investments $ $ June 30.020 $ 3.118 10.776 4.797 872 5.614 1.471 33.295 1.314 3.209 $ 264 $ 76 36 376 125 755 437 164 1.532 3.440 1.374 1.426 2.885 609 9. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe.888 2.218 2.381) (120) 2. Latin America and Caribbean Other Total infrastructure and natural resources Total disbursed investment portfolio Reserve against losses on loans Unamortized deferred loan origination fees.865 430 399 622 183 1.

9 273 7. .294 4.210 5.3 52 53 210 21.1 117 13.711 3.0 417 7.5 $ June 30. the disbursed loan portfolio included $86 million of loans serving as collateral under secured borrowing arrangements ($100 million .7 US dollar Euro Chinese renminbi Indian rupee Mexican peso Philippine pesos Brazilian real South African rand Russian ruble Indonesian rupiah Colombian pesos Turkish lira Vietnamese dong Other currencies OECD currencies Non-OECD currencies Total disbursed loan portfolio After the effect of interest rate swaps and currency swaps. 2012). while the remainder was at variable rates.4 2.3 48 12.4 39 264 $ 22.4 417 10.9 233 9.June 30.814 2. 2012) in conjunction with the settlement of borrowers obligation to IFC. 2013 Average contractual Amount (US$ millions) rate (%) $ 16. 2011. Loans in all currencies are repayable during the years ending June 30. as follows (US$ millions): Fixed rate loans Variable rate loans Total disbursed loan portfolio $ $ 2014 994 4.043 3.129 2. These loans are classified as held-for-sale. IFC’s loans are principally denominated in variable rate US dollars.9 2. 2013.0 472 5.8 390 2. 2013.476 Thereafter $ 1.959 4.606 3. IFC received mortgage loans with an initial carrying amount of $0 ($6 million .635 4.204 $ $ 2015 576 2. 2013.2 8. 2014 through June 30. IFC’s disbursed variable rate loans generally reprice within one year.9 367 7. 21% of the disbursed loan portfolio consisted of fixed rate loans (21% .0 4. 2012 Average Amount contractual (US$ millions) rate (%) 4.694 $ $ 2017 368 2. At June 30.8 198 8.1 40 17. 2018 and thereafter.448 $ $ Total 4.711 3.3 224 9.2 245 8.938 22. 2012 and June 30.4 7. During the year ended June 30. 2013.154 $ 5.606 At June 30. 2012).year ended June 30.3 83 8.287 $ $ 2016 774 2.1 52 14. June 30.668 17.Page 62 INTERNATIONAL FINANCE CORPORATION _ 55 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE E – LOANS AND GUARANTEES Loans Income from loans and guarantees for the years ended June 30.1 337 9.5 145 10.9 157 9.059 $ $ 2012 818 29 68 2 78 (57) 938 $ $ 2011 704 33 52 9 79 877 The currency composition and average contractual rate of the disbursed loan portfolio are summarized below: June 30.497 $ $ 2018 662 1.2 165 11. comprise the following (US$ millions): Interest income Commitment fees Other financial fees Gains on sale of loans Gains on non-monetary exchanges Unrealized gains (losses) on loans accounted for at fair value under the Fair Value Option Income from loans and guarantees $ 2013 879 35 90 20 35 $ 1.920 3.831 5.June 30.9 308 8.1 207 10.9 4.2 $ 15.

381 249 (13) 11 1.038 $ $ $ *Other adjustments comprise reserves against interest capitalized as part of a debt restructuring.628 21. 2012 evaluated for impairment** Recorded investment in loans with specific reserves $ Year ended June 30. net Write-offs Recoveries of previously written off loans Foreign currency transaction adjustments Other adjustments* Ending balance Related recorded investment in loans at June 30.56 _ Page 63 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Reserve against losses on loans and provision for losses on loans Changes in the reserve against losses on loans for the years ended June 30.307 115 (13) 2 (35) 5 1. net Write-offs Foreign currency transaction adjustments Other adjustments* Ending balance Related recorded investment in loans at June 30. net Write-offs Recoveries of previously written off loans Foreign currency transaction adjustments Other adjustments* Ending balance Related recorded investment in loans at June 30.226 $ $ $ Beginning balance Release of provision for losses on loans. 2013 evaluated for impairment** Recorded investment in loans with specific reserves $ $ $ $ Beginning balance Provision for losses on loans.381 20.038 918 $ $ 925 18.303 $ $ Total reserves 1. 2011 evaluated for impairment** Recorded investment in loans with specific reserves $ Year ended June 30. 2012 Specific Portfolio reserves reserves 382 $ 925 $ 76 39 (13) 2 (5) (30) 5 447 20. 2011. 2013. evaluated for impairment individually (specific reserves) and on a pool basis (portfolio reserves) respectively. 2012 and June 30.307 19.403 $ $ 887 20.120 $ $ Total reserves 1.226 923 $ $ 934 19. but not specifically identifiable.923 1. 2011 Specific Portfolio reserves reserves 432 $ 917 $ (16) (24) (56) 4 10 32 8 382 19. June 30.923 Beginning balance Provision (release of provision for) losses on loans.520 $ $ Total reserves 1. 2013 Specific Portfolio reserves reserves 447 $ 934 $ 298 (49) (13) (2) 2 11 741 21. on loans for which no specific reserve is established. as well as the related recorded investment in loans. **IFC individually evaluates all loans for impairment. are summarized below (US$ millions): Year ended June 30.349 (40) (56) 4 42 8 1. . Portfolio reserves are established for losses incurred.

June 30. 2013. 2011. Middle East and North Africa Sub-Saharan Africa. 2012). Loans at amortized cost that are impaired with specific reserves are summarized by industry sector and geographic region as follows (US$ millions): Unpaid principal balance $ 171 517 460 1. 2012 and June 30. 2013. Middle East and North Africa Sub-Saharan Africa. are summarized below (US$ millions): 2013 2012 2011 Beginning balance $ 5 $ $ (Release of) provision for losses on other receivables (2) 5 Ending balance Impaired loans The average recorded investment during the year ended June 30. agribusiness and services Financial markets Asia Europe.514 $ June 30. agribusiness and services Asia Europe.year ended June 30. Latin America and Caribbean Total manufacturing. 2011.010 18 22 7 47 72 187 36 295 1. 2013 was $1. 2013.352 million ($908 million . Middle East and North Africa Sub-Saharan Africa.Page 64 INTERNATIONAL FINANCE CORPORATION _ 57 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Reserve for losses on guarantees and other receivables and provision for losses on guarantees and other receivables Changes in the reserve against losses on guarantees for the years ended June 30. $ $ 165 508 398 1.148 17 24 32 73 72 188 33 293 $ 1. June 30. 2013 Related specific reserve $ 116 297 189 602 3 7 7 17 35 76 11 122 741 $ Average recorded investment $ 162 515 333 1. 2012). June 30. 2013 with no specific reserves. are summarized below (US$ millions): 2013 2012 2011 Beginning balance $ 21 $ 24 $ 24 Release of provision for losses on guarantees (4) (3) Ending balance $ 17 $ 21 $ 24 Changes in the reserve against losses on other receivables for the years ended June 30. The recorded investment in loans at amortized cost that are impaired at June 30. Latin America and Caribbean Total financial markets Infrastructure and natural resources Asia Europe.403 million ($923 million .403 .071 15 17 7 39 72 188 33 293 1. 2012 and June 30. Latin America and Caribbean Other Total infrastructure and natural resources Total IFC had no impaired loans at June 30.352 $ Interest income recognized $ 2 10 13 25 1 1 1 3 4 2 6 34 $ 3 $ 5 $ - Recorded investment Manufacturing. in loans at amortized cost that are impaired was $1.

Latin America and Caribbean Total disbursed loans at amortized cost $ 9 9 $ 8 14 32 54 Total recorded investment in nonaccruing loans $ 90 490 174 $ 754 $ $ .208 Asia Europe. agribusiness and services $ 82 467 142 $ 691 Financial markets Infrastructure and natural resources Asia Europe. 2012 is summarized as follows (US$ millions): Interest income not recognized on nonaccruing loans Interest income recognized on loans in nonaccrual status related to current and prior years. agribusiness and services Financial markets Asia Europe.034 June 30. The interest income on such loans for the years ended June 30. Latin America and Caribbean Total disbursed loans at amortized cost $ 15 4 19 $ 64 129 193 $ $ June 30. Middle East and North Africa Sub-Saharan Africa. agribusiness and services $ 148 460 388 $ 996 Financial markets Infrastructure and natural resources Total recorded investment in nonaccruing loans $ 227 464 517 $ 1. 2012). 2013 ($859 million . 2012 Related specific reserve $ 72 235 46 353 5 18 7 30 25 6 33 64 $ 447 Average recorded investment $ 101 440 163 704 19 48 7 74 70 14 46 130 $ 908 Interest income recognized $ 12 5 17 2 3 1 6 3 3 6 $ 29 Loans on which the accrual of interest has been discontinued amounted to $1. 2012 with no specific reserves. 2013 and June 30.58 _ Page 65 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Recorded investment Manufacturing. Middle East and North Africa Sub-Saharan Africa. Latin America and Caribbean Total manufacturing. Middle East and North Africa Sub-Saharan Africa. Nonaccruing loans $ $ 100 436 181 717 22 40 7 69 73 14 50 137 923 $ $ Unpaid principal balance 106 444 244 794 24 46 32 102 73 14 51 138 1. 2012 Manufacturing. Middle East and North Africa Sub-Saharan Africa.June 30. on a cash basis $ 2013 90 38 $ 2012 47 21 $ 2011 61 22 The recorded investment in nonaccruing loans at amortized cost is summarized by industry sector and geographic region as follow (US$ millions): June 30. agribusiness and services Asia Europe.272 million at June 30. Latin America and Caribbean Total financial markets Infrastructure and natural resources Asia Europe. 2013 Manufacturing. Latin America and Caribbean Total infrastructure and natural resources Total IFC had no impaired loans at June 30. Middle East and North Africa Sub-Saharan Africa.

Page 66 INTERNATIONAL FINANCE CORPORATION _ 59 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Past due loans An age analysis.946 216 6. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe.540 22. Latin America and Caribbean Other Total manufacturing.306 3.946 217 6.961 3.306 2.342 21.860 1. agribusiness and services Financial markets Asia Europe.097 (139) (35) $ 21.126 413 7.131 $ $ Total loans 1. 2013.996 413 7.289 1. Latin America and Caribbean Other Total infrastructure and natural resources Total disbursed loans at amortized cost Unamortized deferred loan origination fees.072 1.627 2. 2013 90 days or greater Total past due past due $ 141 399 146 686 4 4 64 130 194 884 $ $ 141 409 212 762 5 1 6 68 130 198 966 $ $ Manufacturing.837 2.295 1.837 2. agribusiness and services Asia Europe. Middle East and North Africa Sub-Saharan Africa.262 1. Middle East and North Africa Sub-Saharan Africa.212 2.820 2. .803 1.695 2.923 At June 30.290 1.017 7.295 1. of IFC’s loans at amortized cost by industry sector and geographic region follows (US$ millions): 30-59 days past due $ 10 31 41 1 1 $ 42 $ $ 60-89 days past due 35 35 1 1 4 4 40 $ June 30.500 1.017 8. net and other Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets Recorded investment in loans at amortized cost Current 1. there are no loans 90 days or greater past due still accruing. Middle East and North Africa Sub-Saharan Africa. based on contractual terms.

Latin America and Caribbean Other Total infrastructure and natural resources Total disbursed loans at amortized cost Unamortized deferred loan origination fees.548 2. 2012.041 19.477 1.226 At June 30. Middle East and North Africa Sub-Saharan Africa. agribusiness and services Financial markets Asia Europe.548 2.087 20. Middle East and North Africa Sub-Saharan Africa.824 615 6. .250 2.023 1. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe.860 1.717 $ $ Total loans 1.264 3.580 1.198 2. there are no loans 90 days or greater past due still accruing.712 330 5.912 3.020 255 7.60 _ Page 67 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Manufacturing. Middle East and North Africa Sub-Saharan Africa. agribusiness and services Asia Europe.600 1.198 2.988 255 7.712 330 5. Latin America and Caribbean Other Total manufacturing.820 1.816 1.821 2. net and other Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets Recorded investment in loans at amortized cost 30-59 days past due $ 18 18 $ 18 $ $ 60-89 days past due 26 40 66 66 $ $ June 30. 2012 90 days or greater Total past due past due 73 397 63 533 4 4 14 32 46 583 $ $ 91 423 103 617 4 4 14 32 46 667 $ $ Current 1.927 615 7.576 1.384 (120) (38) $ 20.

well-defined weaknesses may adversely impact collection but no loss of principal is expected. good management. watch. high market share. serious liquidity and debt service capacity issues: large and increasing past due amounts: partial loss is very likely. Each loan is categorized as very good. follows: Credit quality indicator Description Very good Excellent debt service capacity. average size and market share. loan not fully secured: partial past due amounts of interest and/or principal. uncompetitive products and operations. Good Average Watch Substandard Strong debt service capacity: good liquidity. Close to or already in bankruptcy. higher than average leverage ratio. Bad financial performance. average. Tight liquidity. may also have strong collateral and/or guaranteed arrangements. doubtful or loss. difficulty servicing debt. superior management.Page 68 INTERNATIONAL FINANCE CORPORATION _ 61 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Loan Credit Quality Indicators IFC utilizes a rating system to classify loans according to credit worthiness and risk. very strong management. in terms of the attributes of the borrower. A description of each category (credit quality indicator). Poor financial performance. stable performance. default and total loss highly likely. the business environment in which the borrower operates or the loan itself. substandard. serious regional geopolitical issues/conflicts. financial performance below expectations. inadequate net worth and debt service capacity. week management in certain aspects. average liquidity. unfavorable or unstable macroeconomic factors. Doubtful Loss . very favorable operating environment. market leader. minimal probability of financial deterioration. good debt service capacity. good. Satisfactory balance sheet ratios.

880 $ 86 $ 400 208 3 697 12 165 10 187 79 290 238 206 813 1.126 413 7. 2012 respectively.295 1.262 1. 2013 and June 30.946 217 6. 2013 Very good Manufacturing.295 1.961 3.62 _ Page 69 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of IFC’s loans at amortized cost by credit quality indicator updated effective June 30.183 5.802 242 289 148 216 895 664 924 1.072 1. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe.837 2.472 123 3.072 49 2. Latin America and Caribbean Europe Other Total manufacturing. net and other Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets Recorded investment in loans at amortized cost $ Good Average Watch Substandard Doubtful Loss Total .799 713 530 870 2.540 22.280 911 1 3.923 .695 2.306 3. Middle East and North Africa Sub-Saharan Africa. Middle East and North Africa Sub-Saharan Africa.518 $ 440 $ 994 344 24 1. as well as by industry sector and geographic region follows (US$ millions): June 30.097 (139) (35) 21.$ 9 25 34 41 41 75 $ 420 $ 369 184 826 1.715 $ 830 $ 986 998 164 2.978 813 1.212 2. Latin America and Caribbean Other Total infrastructure and natural resources Total disbursed loans at amortized cost $ Unamortized deferred loan origination fees.005 589 825 1.535 8.697 $ 51 $ 86 248 385 16 27 7 50 8 22 43 73 508 $ 134 $ 368 65 567 4 4 64 69 133 704 $ 1. agribusiness and services Financial markets Asia Europe.113 291 245 232 35 803 4. Middle East and North Africa Sub-Saharan Africa.017 8. agribusiness and services Asia $ Europe.

2013 ($3. 2013 totaled $4. Guarantees of $3. where default is defined as failure to pay when payment is due.Page 70 INTERNATIONAL FINANCE CORPORATION _ 63 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30. Guarantees signed at June 30..420 million .066 1.097 283 1.181 2.$ 381 $ 312 218 336 1.904 553 779 1.June 30.450 $ 461 $ 904 531 1. not called) at June 30.383 109 3. Under the terms of IFC’s guarantees.e.440 1. 2013 that had been modified in a troubled debt restructuring within 12 months prior to the date of default.137 630 1. agribusiness and services Financial markets Asia Europe.198 2. Middle East and North Africa Sub-Saharan Africa.264 3.June 30.384 (120) (38) 20. There were no loans that defaulted during the year ended June 30. Middle East and North Africa Sub-Saharan Africa. . Guarantees entered into by IFC generally have maturities consistent with those of the loan portfolio. 2012).015 102 2.$ . agribusiness and services Asia $ Europe. Middle East and North Africa Sub-Saharan Africa.221 $ 187 $ 302 110 599 267 10 277 35 31 226 292 1.580 1.927 615 7. Latin America and Caribbean Europe Other Total manufacturing. The outstanding amount represents the maximum amount of undiscounted future payments that IFC could be required to make under these guarantees.712 330 5. 2012 Very good Manufacturing.168 $ 81 $ 231 114 426 22 57 7 86 41 143 54 238 750 $ 9 $ 182 21 212 4 4 32 2 41 75 291 $ 1. Latin America and Caribbean Other Total infrastructure and natural resources Total disbursed loans at amortized cost $ Unamortized deferred loan origination fees.504 $ 793 $ 1.820 1.188 6.092 933 279 3.020 255 7.023 1.412 257 243 301 44 845 3. 2012).912 3.565 million that were outstanding (i. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe. Guarantees IFC extends financial guarantee facilities to its clients to provide full or partial credit enhancement for their debt securities and trade obligations. were not included in loans on IFC’s consolidated balance sheet.449 8.548 2.933 million ($4.477 1.087 20.226 Loan modifications during the year ended June 30. IFC agrees to assume responsibility for the client’s financial obligations in the event of default by the client. 2013 considered troubled debt restructurings were not significant. net and other Disbursed amount allocated to a related financial instrument reported separately in other assets or derivative assets Recorded investment in loans at amortized cost $ Good Average Watch Substandard Doubtful Loss Total .247 649 425 338 1.507 million .896 244 387 176 330 1.

Based upon IFC’s assessment of the expected credit losses.425 $ . Accordingly. comprise the following (US$ millions): Interest income Dividends Realized gains (losses) on sales of debt securities Gains on non-monetary exchanges Other-than-temporary impairments Unrealized (losses) gains on debt securities accounted for at fair value under the Fair Value Option Total income from debt securities $ 2013 59 14 10 7 (46) (39) $ 5 $ $ 2012 60 14 12 1 (27) 21 81 $ $ 2011 39 9 (2) 4 (2) (2) 46 Debt securities accounted for as available-for-sale at June 30. 2012 are summarized below (US$ millions): Less than 12 months Fair Unrealized value losses 127 $ (3) 179 (15) 306 $ (18) 12 months or greater Fair Unrealized value losses 339 $ (23) 339 $ (23) Fair value Total 466 179 645 Unrealized losses $ (26) (15) $ (41) Corporate debt securities Preferred shares Total $ $ $ $ $ $ Corporate debt securities comprise investments in bonds and notes. Based upon IFC’s assessment of expected credit losses. 2013 Unrealized Amortized cost Fair value gains losses $ 1.399 483 41 (15) 509 6 6 2 2 $ 1.$ (26) $ 1. June 30. Unrealized losses associated with preferred shares are primarily driven by changes in discount rates associated with changes in credit spreads or interest rates.381 $ 6 $ (17) $ 1. 2011. 2013 and June 30. Preferred shares comprise investments in preferred equity investments that are redeemable at the option of IFC or mandatorily redeemable by the issuer. 2012 comprise (US$ millions): June 30.911 June 30. 2013. 2012 and June 30. IFC expects to recover the cost basis of these securities. minor changes in exchange rates and comparable market valuations in the applicable sector. 2013 are summarized below (US$ millions): Less than 12 months Fair Unrealized value losses 224 $ (5) 23 (2) 247 $ (7) 12 months or greater Fair Unrealized value losses 173 $ (12) 106 (8) 279 $ (20) Fair value Total 397 129 526 Unrealized losses $ (17) (10) $ (27) Corporate debt securities Preferred shares Total $ $ $ $ $ $ Unrealized losses on debt securities accounted for as available-for-sale at June 30. 2012 Unrealized Amortized cost Fair value gains losses $ 1.916 Corporate debt securities Preferred shares Asset-backed securities Other debt securities Total Unrealized losses on debt securities accounted for as available-for-sale at June 30. Unrealized losses associated with corporate debt securities are primarily attributable to movements in the credit default swap spread curve applicable to the issuer.370 438 43 (10) 471 67 67 3 3 $ 1. .916 $ 41 $ (41) $ 1.64 _ Page 71 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE F – DEBT SECURITIES Income from debt securities for the years ended June 30. IFC has determined that the issuer is expected to make all contractual principal and interest payments. IFC expects to recover the cost basis of these securities.889 $ 49 $ (27) $ 1.

2011) of receipts received in freely convertible currency.6 121 6. IFC estimates that the underlying assets of the funds will be liquidated over five to eight years. .year ended June 30.Page 72 INTERNATIONAL FINANCE CORPORATION _ 65 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Debt securities with contractual maturities that are accounted for as available-for-sale have contractual maturities during the years ending June 30. These investments cannot be redeemed. $57 million . as reported above.3 69 2.000 3 274 (272) (420) (692) (128) $ 1. 2014 through June 30.1 Other non-OECD currencies 73 5.5 After the effect of interest rate swaps and currency swaps. 2012). The currency composition and average contractual rate of debt securities with contractual maturities that are accounted for as available-for-sale are summarized below: June 30.4 511 10. 2012 Average Average Amount contractual Amount contractual (US$ millions) rate (%) (US$ millions) rate (%) US dollar $ 816 3.2 Euro 100 3.1 Turkish lira 88 7. 2011 comprises the following (US$ millions): 2013 2012 2.5 Brazilian real 261 7. IFC has $505 million of redeemable preferred shares and other debt securities with undefined maturities ($489 million .438 $ $ $ $ $ $ The expected maturity of asset-backed securities may differ from the contractual maturity.7 Total disbursed portfolio of debt securities with contractual maturities $ 1.June 30.June 30. NOTE G – EQUITY INVESTMENTS Income from equity investments for the years ended June 30. 2012. for which cost has been fully recovered. 2013 ($43 million .3 169 6. The fair values of all these funds have been determined using the net asset value of IFC’s ownership interest in partners’ capital and totaled $2. net of cash disbursements.5 $ 541 3. Instead distributions are received through the liquidation of the underlying assets of the funds. 2013 ($2.181 million .438 4.436 6.year ended June 30. as follows (US$ millions): Corporate debt securities Asset-backed securities Preferred shares Total disbursed portfolio of debt securities with contractual maturities $ 2014 207 2 209 $ 2015 201 2 203 $ 2016 136 67 203 $ 2017 100 2 102 $ 2018 319 1 320 Thereafter $ 345 12 44 $ 401 $ Total 1. due to prepayment features. 2012).464 Dividends and profit participations include $36 million at June 30.457 $ 2011 Realized gains on equity sales.6 South African rand 100 5. fees and other Other-than-temporary impairments: Equity investments at cost less impairment Equity investments available-for-sale Total other-than-temporary impairments Unrealized gains (losses) on equity investments Total income from equity investments $ 921 6 248 (8) (152) (289) (441) 26 $ $ 737 217 280 (6) (87) (131) (218) 454 $ 752 1.7 $ 1. In addition.308 86 44 1. 2012 and June 30. IFC’s debt securities with contractual maturities that are accounted for as available-forsale are principally denominated in variable rate US dollars.9 25 8. June 30. 2013 June 30. 2018 and thereafter.687 million as of June 30. net Gains on non-monetary exchanges Dividends and profit participations Custody. Equity investments include several private equity funds that invest primarily in emerging markets across a range of sectors and that are accounted for at fair value under the Fair Value Option. in respect of investments accounted for under the cost recovery method. 2013.

368 290 $ 12.281 $ $ June 30.087 250 10. 2012 691 126 507 229 89 225 (106) 208 1. 2013 236 135 440 207 89 233 (122) 200 1.016 $ $ June 30.621 $ $ June 30.978 The disbursements of investment transactions committed but not disbursed or utilized are generally subject to fulfillment of conditions of disbursement.961 6. equity investments and debt securities Investment transactions committed but not utilized: Guarantees Client risk management facilities Total investment transactions committed but not disbursed or utilized June 30. 2012 1. NOTE I – LOAN PARTICIPATIONS Loan participations signed as commitments for which disbursement has not yet been made and loan participations disbursed and outstanding which are serviced by IFC for participants are as follows (US$ millions): Loan participations signed as commitments but not disbursed Loan participations disbursed and outstanding which are serviced by IFC NOTE J – RECEIVABLES AND OTHER ASSETS Receivables and other assets are summarized below (US$ millions): Receivables from unsettled security trades Accrued interest income on time deposits and securities Accrued income on derivative instruments Accrued interest income on loans Headquarters building: Land Building Less: Accumulated building depreciation Headquarters building. 2013 $ 10.66 _ Page 73 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE H – INVESTMENT TRANSACTIONS COMMITTED BUT NOT DISBURSED OR UTILIZED Loan. equity and debt security commitments signed but not yet disbursed.829 $ $ June 30.358 1. 2013 1. 2012 9. and guarantee and client risk management facilities signed but not yet utilized are summarized below (US$ millions): Investment transactions committed but not disbursed: Loans. net Deferred charges and other assets Total receivables and other assets $ $ June 30.641 1.463 .068 2.063 2.880 6.

4 US dollar Australian dollar Japanese yen New Zealand dollar Turkish lira Brazilian real South African rand Russian ruble Pound sterling Chinese renminbi Mexican peso Euro Canadian dollar Norwegian kroner Hong Kong dollar Nigerian naira Costa Rican colones C.8) (269) (7.4 (447) (2.2) $ 37.0 4.616) (4.4) 8 0.1 10.5 Net currency obligation Amount Weighted (US$ average millions) rate (%) $ 43. net of unamortized issue premiums and discounts.2 4.8 3.1) (49) (10. net Total market borrowings Fair value adjustments Carrying amount of market borrowings .2 2.148 1.987) (1.767 0.462 177 $ 44.5 0.6 3.9 4.367 1.645 1.328 0.316 44.9 10.4 (37.3) (183) (2.8) (11) (14.684) (2.616 1.8) (166) (3.8) 30 6.3 122 351 8 25 40 9 $ 43.3) (406) (3.9) (81) (1.9) $ 458 $ (220) Market borrowings Amount Weighted (US$ average millions) rate (%) $ 25.8 2.639 4.136) (4.3) (128) (5.883 4.A.9) (320) (4. franc South Korean won New Ghanaian cedi Dominican pesos Principal at face value Borrowings under the shortterm Discount Note Program Unamortized discounts.4) (8.3) (692) (6.8 2.9) (39) (1.318 692 498 447 432 320 277 183 166 128 74 60 40 39 11 9 43.3) (1.2 7.9 3.5 6.6) (1.8) (2.684 1.961 (499) 44.367) (7.4 (8) (0. 2013 Interest rate swaps Currency swaps notional principal payable (receivable) payable (receivable) Notional Amount amount Weighted Weighted (US$ average (US$ average millions) rate (%) millions) rate (%) $ 18.3 6.8 7.9 8.6 4.4 10.318) (6.Page 74 INTERNATIONAL FINANCE CORPORATION _ 67 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE K – BORROWINGS Market borrowings and associated derivatives IFC's borrowings outstanding from market sources and currency and interest rate swaps.3 7.3 1. are summarized below: June 30.F.400 (0.2) (60) (7.5) (1.2 0.3 5.136 2.3 10.3 3.8 14.

June 30.048) (5.831 1.5 $ (1. $3 million .6) (629) (6. 2011).0) (111) (4. 2011) and is net of $11 million of gains on buybacks of market borrowings ($19 million .8) 30 6.1 8.June 30. 2013 (receivable of $1. 2012).4 2.7 (35.6) (60) (7.June 30.7) (9. 2012. Charges on borrowings for the year ended June 30.2 3.9 1.9) (913) (8. 2012). 2013 have generally been invested and/or onlent to the clients in such currencies. Short-term market borrowings IFC’s short-term Discount Note Program has maturities ranging from overnight to one year.966) $ (246) Market borrowings Amount Weighted (US $ average millions) rate (%) $ 22. The weighted average remaining maturity of IFC’s borrowings from market sources was 4. respectively.6 6. and Russian rubles at June 30. . 2011). included in derivative assets and derivative liabilities. 2012.9 3.8 Net currency obligation Amount Weighted (US $ average millions) rate (%) $ 40.8) (30) (5.7 US dollar Australian dollar Japanese yen Turkish lira New Zealand dollar Brazilian real Canadian dollar South African rand Pound sterling Chinese renminbi Norwegian kroner Euro Singapore dollar Hong Kong dollar Mexican peso Swiss franc Costa Rican colones South Korean won C. Dominican pesos.831) (2. on the consolidated balance sheet.F. 2012).9 5. The net nominal amount payable from currency swaps of $458 million and the net notional amount receivable from interest rate swaps of $220 million at June 30. net Total market borrowings Fair value adjustments Carrying amount of market borrowings 42. shown in the above table.6 7.9) (490) (3.316 million ($1. 2013 (5. Charges on borrowings for the year ended June 30.2 1.0 (8) (0.0 4.1 3.5 years .8) (158) (1.A.400 million . Chinese renminbi.A. $4 million .4) (780) (4.048 3.June 30.8 4.300 (640) 43.946 (0.900 1.June 30.823 million ($3.688 3.1 5.F.801 1. 2013 include $4 million of interest expense on secured borrowings ($5 million .9) (1.year ended June 30.4 4.5 0.0 4.400 44.1) (277) (3. include $2 million in respect of this program ($1 million .68 _ Page 75 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30.1) (128) (5.273 0.year ended June 30. franc Russian ruble Principal at face value Borrowings under the shortterm Discount Note Program Unamortized discounts. 2012 Interest rate swaps notional principal Currency swaps payable (receivable) payable (receivable) Notional Amount amount Weighted Weighted (US $ average (US $ average millions) rate (%) millions) rate (%) $ 17.8) 8 1.208 0.573 2.454) (1.June 30.801) (8.3 9.6 339 8 38 30 $ 40.4 6. The amount outstanding under the program at June 30. 2013.3 5.9 8. are represented by currency and interest rate swap assets at fair value of $1.503 million and currency and interest rate swap liabilities at fair value of $1.3 6.264) (5.1 years at June 30.1 6.June 30.369 million and $627 million .year ended June 30.1) (124) (6. $10 million . francs.9) (39) (1.6 1.660 963 $ 44.966 million from currency swaps and of $246 million from interest rate swaps . 2012. 2012).4) (3.1) (1.264 913 780 629 490 339 277 267 158 128 124 111 60 39 38 30 5.623 The net currency obligations in C.5) $ 35. Nigerian naira. 2013 is $1.4) (259) (6.

net Fair value adjustments Carrying amount of borrowings After the effect of interest rate and currency swaps. during the years ending June 30.500 shares at a par value of $1.225 114 2.0 $ 42 Saudi Arabian riyal US dollar Total borrowings outstanding from IBRD The weighted average remaining maturity of borrowings from IBRD was 3.year ended June 30. 2013 395 153 179 86 183 1.316 230 45.389 $ Thereafter $ 5.874 $ $ Total 43. 2013.858 $ 2014 9.061 $ $ 2016 6. 2018.year ended June 30. 2012). through June 30.645 1.191 198 8. 2013 (2. $2 million .000 each . 2011) in respect of borrowings from IBRD. to $2.321 shares.year ended June 30. Maturity of borrowings The principal amounts repayable on borrowings outstanding in all currencies. 2011).000 each . 2012 491 180 477 100 338 1. and the issuance of $200 million of shares (including $70 million of unallocated shares).162 110 2.June 30.2 $ 230 June 30. 2012.027 8 7. IFC’s borrowings generally reprice within one year.year ended June 30. at a par value of $1. 2013. includes $2 million ($2 million .316 8 $ 10.874 5. gross of any premiums or discounts. were subscribed and paid by member countries (2.869 $ $ $ . 2012 Weighted Principal average amount cost (%) (US$ millions) $ 42 4.244 $ $ 2017 7.Page 76 INTERNATIONAL FINANCE CORPORATION _ 69 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Borrowings from IBRD Borrowings outstanding from IBRD and currency are summarized below: June 30.053 8 7. During the year ended June 30. 31. 2013 Weighted Principal average amount cost (%) (US$ millions) $ 34 4.588 $ $ 2015 7.580 million. the Board of Directors recommended that the Board of Governors approve an increase in the authorized share capital of IFC of $130 million. 2012. 0 shares at a par value of $1.8 years at June 30. 2014.000 each.335 $ June 30. accrued expenses and other liabilities Deferred income Total payables and other liabilities NOTE M – CAPITAL TRANSACTIONS On July 20. NOTE L – PAYABLES AND OTHER LIABILITIES Payables and other liabilities are summarized below (US$ millions): Accrued charges on borrowings Accrued charges on derivative instruments Payables for unsettled security trades Secured borrowings Liabilities under retirement benefit plans Accounts payable. The resolution recommended by the Board of Directors was adopted by the Board of Governors on March 9. The amendment to the Articles of Agreement and the increase in the authorized share capital have become effective on June 27.264 1.236 8 6.0 196 0. 2012. gross Unamortized discounts.7 years . Charges on borrowings for the year ended June 30. 2010. $ June 30.191 (499) 177 44. and thereafter are summarized below (US$ millions): Borrowings from market sources Borrowings under the short-term Discount Note Program Borrowings from IBRD Total borrowings. 2012.035 $ $ 2018 8.

If such an agreement is not made within six months after the member withdraws or such other time as IFC and the member may agree. IFC recognizes designation of retained earnings for advisory services when the Board of Directors approves it and recognizes designation of retained earnings for grants to IDA when it is noted with approval by the Board of Governors. 2010 Year ended June 30.70 _ Page 77 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Under IFC’s Articles of Agreement. The repurchase of capital stock is subject to certain conditions including payments in installments. 2011 Designations of retained earnings Expenditures against designated retained earnings At June 30.year ended June 30. 2012. 2013. On January 15. 2012. 2013 $ 600 $ 313 10 $ 101 - $ 37 - $ 30 - $ 481 610 (600) $ 330 $ (106) 217 69 $ (47) 54 $ (3) 34 $ 30 $ (756) 335 399 (330) $ 340 $ (67) 219 80 $ (13) 41 $ (2) 32 $ 30 $ (412) 322 420 (340) $ $ (100) 199 $ (10) 31 $ (4) 28 $ (10) 20 $ (464) 278 On August 9.year ended June 30.year ended June 30. IFC’s Articles of Agreement also provide for the withdrawing member to repay losses on loans and equity investments in excess of reserves provided on the date of withdrawal. the Board of Directors approved a designation of $340 million of IFC’s retained earnings for grants to IDA and $80 million of IFC’s retained earnings for advisory services. NOTE N – OTHER INCOME Other income for the year ended June 30. for a final settlement of all obligations of the member to IFC. the repurchase price of the member’s capital stock shall be the value thereof shown by the books of IFC on the day when the member withdraws. the Board of Governors noted with approval the designations approved by the Board of Directors. 2011) and income under other reimbursable arrangements of $8 million ($10 million .year ended June 30. NOTE O – RETAINED EARNINGS DESIGNATIONS AND RELATED EXPENDITURES AND ACCUMULATED OTHER COMPREHENSIVE INCOME Designated retained earnings The components of designated retained earnings and related expenditures are summarized below (US$ millions): SME Ventures for IDA countries Global Infrastructure Project Development Fund Total designated retained earnings Grants to IDA Advisory services Performancebased grants At June 30. 2012 Designations of retained earnings Expenditures against designated retained earnings At June 30.year ended June 30. 2011). 2012 Year ended June 30. On October 12. 2011 Year ended June 30. 2013 Designations of retained earnings Expenditures against designated retained earnings At June 30. $29 million . 2012. $24 million . 2012. $41 million of income from consolidated entities ($28 million . predominantly comprises $25 million of fees collected from clients ($20 million . .year ended June 30. 2012. 2012. among other things. 2012 and noted with approval by the Board of Governors on October 12. in the event a member withdraws from IFC. taking into account the financial position of IFC. IFC and the member may negotiate on the repurchase of the member’s capital stock on such terms as may be appropriate under the circumstances. 2013. Such agreement may provide. at such times and in such available currency or currencies as IFC reasonably determines. $6 million . 2011). IFC recognized expenditures against grants to IDA on signing of a grant agreement between IDA and IFC concerning the transfer to IDA and use of funds corresponding to designation of retained earnings for grants to IDA approved by the Board of Directors on August 9.

121 $ June 30. The magnitude and direction (gain or loss) can be volatile from period to period but do not alter the cash flows on the market borrowings.Page 78 INTERNATIONAL FINANCE CORPORATION _ 71 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accumulated other comprehensive income The components of accumulated other comprehensive income at June 30. comprises (US$ millions): Net realized gains and losses on derivatives associated with investments: Realized (losses) gains on derivatives associated with loans Realized gains on derivatives associated with debt securities Realized gains on derivatives associated with equity investments Total net realized gains on derivatives associated with investments Net gains and losses on non-monetary exchanges of derivatives associated with investments: Gains (losses) on non-monetary exchanges of derivatives associated with loans Gains on non-monetary exchanges of derivatives associated with debt securities Gains on non-monetary exchanges of derivatives associated with equity investments Total net non-monetary gains on derivatives associated with investments Net unrealized gains and losses on other non-trading financial instruments: Unrealized gains and losses on derivatives associated with investments: Unrealized gains (losses) on derivatives associated with loans Unrealized gains (losses) on derivatives associated with debt securities Unrealized (losses) gains on derivatives associated with equity investments Total unrealized gains (losses) on derivatives associated with investments Unrealized gains and losses on market borrowings accounted for at fair value: Credit spread component Interest rate. unrealized losses are recorded (notwithstanding the impact of other factors. 2013 22 1.207) 1. 2013 and June 30. Differences arise between the movement in the fair value of market borrowings and the fair value of the associated derivatives primarily due to the different credit characteristics. 2012 and June 30. 2011.001 (206) (240) (219) $ (68) (30) 75 (23) (44) 187 143 (50) 93 70 155 As discussed in Note A. 2012 1.450 (937) 513 $ $ NOTE P – NET GAINS AND LOSSES ON OTHER NON-TRADING FINANCIAL INSTRUMENTS ACCOUNTED FOR AT FAIR VALUE Net gains and losses on other non-trading financial instruments accounted for at fair value for the years ended June 30. .835 (736) 1. foreign exchange and other components Total unrealized gains (losses) on market borrowings Unrealized (losses) gains on derivatives associated with market borrowings Net unrealized gains (losses) on market borrowings and associated derivatives Total net unrealized gains (losses) on other non-trading financial instruments Net gains (losses) on other non-trading financial instruments accounted for at fair value $ 2013 $ (30) 25 40 35 $ 2012 (1) 12 11 $ 2011 4 11 48 63 2 2 (1) 11 10 8 14 22 279 134 (60) 353 31 755 786 (754) 32 385 422 $ (99) (14) 79 (34) (59) (1. 2013. such as changes in risk-free interest and foreign currency exchange rates). The change in fair value reported in “Net unrealized gains (losses) on market borrowings and associated derivatives” includes the impact of changes in IFC's own credit spread. “Summary of significant accounting and related policies”. 2012 are summarized as follows (US$ millions): Net unrealized gains on available-for-sale debt securities Net unrealized gains on available-for-sale equity investments Unrecognized net actuarial losses and unrecognized prior service costs on benefit plans Total accumulated other comprehensive income $ June 30.148) (1. As credit spreads widen. June 30. unrealized gains are recorded and when such credit spreads narrow. market borrowings with associated derivatives are accounted for at fair value under the Fair Value Option.

823 2. The fair value of derivative instrument assets and liabilities by risk type at June 30. 2011 is summarized as follows (US$ millions): Derivative risk category Interest rate Income statement location Income from loans and guarantees Income from liquid asset trading activities Charges on borrowings Other income Net gains and losses on other non-trading financial instruments accounted for at fair value Foreign currency transaction gains and losses on non-trading activities Income from liquid asset trading activities Net gains and losses on other non-trading financial instruments accounted for at fair value Income from loans and guarantees Income from debt securities Income from liquid asset trading activities Charges on borrowings Foreign currency transaction gains and losses on non-trading activities Net gains and losses on other non-trading financial instruments accounted for at fair value Other income Net gains and losses on other non-trading financial instruments accounted for at fair value Net gains and losses on other non-trading financial instruments accounted for at fair value Total $ $ 2013 (48) (237) 373 9 (365) 134 (179) 14 (157) (29) 164 910 (2.829) (105) (7) 93 (1) (2.787 780 1 3. . including lending. liquid asset management and asset and liability management.116 418 2 4. June 30. 2012 and June 30. None of these derivative instruments are designated as hedging instruments under ASC Topic 815. “Summary of significant accounting and related policies”. IFC enters into transactions in various derivative instruments for financial risk management purposes in connection with its principal business activities.376 446 41 1. 2013.292 $ $ 2011 (50) (238) 464 11 (38) 46 (33) (11) (198) (79) (32) 943 993 (81) (5) 135 7 1. equity investments. 2012 Fair value 905 174 3.834 Foreign exchange Interest rate and currency Equity Other derivative contracts The income related to each derivative instrument category includes realized and unrealized gains and losses. 2013 and June 30. investing in debt securities.615 410 68 782 1 1.261 $ $ $ $ $ $ The effect of derivative instruments contracts on the consolidated income statement for the years ended June 30. Note A describes how and why IFC uses derivative instruments. 2012 is summarized as follows (US$ millions): Consolidated balance sheet location Derivative assets Interest rate Foreign exchange Interest rate and currency Equity Other derivative Total derivative assets Derivative liabilities Interest rate Foreign exchange Interest rate and currency Equity and other Total derivative liabilities June 30. 2013 Fair value $ 684 124 1. borrowing.72 _ Page 79 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE Q – DERIVATIVE AND OTHER FINANCIAL INSTRUMENTS As discussed in Note A.260) $ $ 2012 (39) (282) 440 2 267 75 (22) 26 (187) (61) (74) 940 512 660 40 (5) 2.310 $ June 30. client risk management.

IFC had $245 million ($183 million . foreign exchange contracts was $10.605 million .400 million ($51.765 million ($28. 2012) of outstanding obligations to return cash collateral under master netting agreements.June 30. since IFC generally holds loans. and minor changes in assumptions or methodologies may materially affect the estimated values. IFC’s Portfolio Valuation Unit and Loss Provisioning Unit in the Accounting and Financial Operations department.147 million June 30. 2012. because of the wide range of permitted valuation techniques and numerous estimates that must be made in the absence of secondary market prices.June 30. 2012). of interest rate contracts was $55. 2012) and interest rate and currency contracts was $31. IFC enters into interest rate and currency derivative instruments under standard industry contracts that contain credit risk-linked contingent features with respect to collateral requirements. If IFC was downgraded from the current AAA to AA+ or less.853 million ($11. Therefore. can be derived from observable data or are supported by observable levels at which market transactions are executed.June 30. The fair values of the individual financial instruments do not represent the fair value of IFC taken as a whole. loan investments and related derivatives). debt securities. 2013 ($105 million . the credit support annexes of these standard swap agreements detail. In different interest rate environments. NOTE R – FAIR VALUE MEASUREMENTS Many of IFC’s financial instruments are not actively traded in any market. All of IFC’s financial instruments in its liquid assets portfolio are managed according to an investment authority approved by the Board of Directors and investment guidelines approved by IFC’s Corporate Risk Committee (CRC). by swap counterparty. ii) Level 2 financial instruments are valued using models and other valuation methodologies and substantially all of the inputs are observable in the market place. the fair value of IFC’s financial assets and liabilities could differ significantly. which is a subcommittee of CRC.June 30. then collateral in the amount of $233 million would be required to be posted against net liability positions with counterparties at June 30. .June 30. 2013 ($6 million . maintains oversight for the pricing of liquid assets. 2013. i) Level 1 primarily consists of financial instruments whose values are based on unadjusted quoted market prices. IFC’s regional and industry departments are primarily responsible for fair valuing IFC’s investment portfolio (equity investments. Level 2 or Level 3 based on the fair value hierarchy in ASC 820. IFC had no collateral posted under these agreements. reviews significant valuation principles and the reasonableness of high exposure valuations quarterly. 2013. IFC’s financial instruments measured at fair value have been classified as Level 1. This lack of objective pricing standards introduces a greater degree of subjectivity and volatility to these derived or estimated fair values. provide oversight over the fair valuation process by monitoring and reviewing the fair values of IFC’s investment portfolio. Should IFC’s credit rating be downgraded from the current AAA.Page 80 INTERNATIONAL FINANCE CORPORATION _ 73 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At June 30. the collateral requirements IFC must satisfy in this event. 2013. At June 30.730 million . iii) Level 3 consists of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing inputs that are non-observable. The vendor prices are evaluated by IFC's Treasury department and IFC’s Integrated Risk department. 2012). As of June 30. as described in Note A. especially the fair value of certain fixed rate financial instruments. IFC’s Valuation Oversight Subcommittee. Accordingly. estimates and present value calculations of future cash flows are used to estimate the fair values. 2012).June 30. 2012). Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. 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 IFC. The aggregate fair value of derivatives containing a credit risk-linked contingent feature in a net liability position was $724 million at June 30. 2013. The excess or deficit resulting from the difference between the carrying amounts and the fair values presented does not necessarily reflect the values which will ultimately be realized. borrowings and other financial instruments with contractual maturities. 2012). The estimated fair values reflect the interest rate environments as of June 30. measured by US$ equivalent notional. the outstanding volume. Determining future cash flows for fair value estimation is subjective and imprecise. Reasonable comparability of fair values among financial institutions is not likely. there were 263 equity risk and other contracts related to IFC’s loan and equity investment portfolio recognized as derivatives assets or liabilities under ASC Topic 815 (221 equity risk and other contracts . a subcommittee of IFC’s Management Team. At June 30. IFC's borrowings are fair valued by the Quantitative Analysis Group in IFC’s Treasury department under the oversight of the Integrated Risk department. with the aim of realizing their contractual cash flows. Third party independent vendor prices are used to price the vast majority of the liquid assets. 2013 and June 30.

759 Significant inputs Discount rate Valuation multiples* Third party pricing Range (%) 8. When vendor prices are not available. broker/dealer quotes. and other reference data.102 $ 2. 2013. In addition to these inputs. Liquid assets . and credit enhancements.0 0. Loans and debt securities .545 416 98 2. vintage. Certain loans contain embedded conversion and/or income participation features.preferred shares June 30.85. 2013 Fair value (US$ Valuation technique millions) Discounted cash flows $ 267 Relative valuations 130 Net asset value 148 Recent transactions 33 Other techniques 7 585 Discounted cash flows Recent transactions Other techniques Total loans and other debt securities Total $ 1. quasi-government securities and sovereign or sovereign-guaranteed securities include reported trades.9 . are summarized below.0 2.037 57 8 2. valuation models for securitized or collateralized securities use collateral performance inputs.7 . Other significant inputs for valuing corporate securities. Liquid assets valued using quoted market prices are also classified as Level 1.059 2.9 45.50. exchange quoted prices are obtained and these are classified as Level 1 in accordance with ASC 820. 2013 and June 30.0 Total preferred shares Loans and other debt securities Debt securities .6 Weighted average (%) 12. volatilities. such as weighted average coupon rate. The valuation techniques and significant unobservable inputs for loans and debt securities classified as Level 3 as of June 30.0 .preferred shares Significant inputs Discount rate Valuation multiples* Third party pricing Range (%) 6. The critical factors in valuing liquid assets in both Level 2 and Level 3 are the estimation of cash flows and yield.85. constant default rate.0 .3 n/a Credit default swap spreads Expected recovery rates 1.2 n/a Total preferred shares Loans and other debt securities Credit default swap spreads Expected recovery rates 0. The remaining liquid assets valued using vendor prices are classified as Level 2 or Level 3 based on the results of IFC’s evaluation of the vendor's pricing methodologies. these features are considered in determining the loans’ fair value based on the quoted market prices or other calculated values of the equity investments into which the loans are convertible and the discounted cash flows of the income participation features. If not bifurcated as standalone derivatives.0 .0 n/a 3. . 2012.9 44. The most liquid securities in the liquid asset portfolio are exchange traded futures. and US Treasuries. conditional prepayment rate.8 n/a Total loans and other debt securities Total * In case of valuation techniques with multiple significant inputs. and June 30. For exchange traded futures and options. the range and weighted average are not provided. Securities valued using vendor prices for which there is evidence of high market trade activity may also be classified as Level 1. weighted average maturity.644 Weighted average (%) 13.The primary pricing source for the liquid assets is valuations obtained from external pricing services (vendor prices).18. Most vendor prices use some form of matrix pricing methodology to derive the inputs for projecting cash flows or to derive prices. 2012 are presented below: June 30. benchmark securities. US Treasuries are valued using index prices and also classified as Level 1.0 .0 0. options. liquid assets are valued internally by IFC using yield-pricing approach or comparables model approach and these are classified as Level 2 or Level 3 depending on the degree that the inputs are observable in the market.80. option adjusted spread curve. 2012 Fair value (US$ millions) Valuation technique Discounted cash flows $ 159 Relative valuations 91 Net asset value 123 Recent transactions 275 Other techniques 9 657 Discounted cash flows Recent transactions Other techniques 2.0 Debt securities .Loans and debt securities in IFC’s investment portfolio that do not have available market prices are primarily valued using discounted cash flow approaches.22. All loans measured at fair value are classified as Level 3.74 _ Page 81 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The methodologies used and key assumptions made to estimate fair values as of June 30.

Inter-bank yield curve and IFC's credit curve. foreign exchange basis curve and yield curves specified to index floating rates. 2012 Fair value (US$ millions) Type Fixed strike price options $ 76 Variable strike price options 332 Other techniques 7 4 $ 419 Significant inputs Volatilities Contractual strike price* Range (%) 14. The significant inputs used in valuing the various classes of derivative instruments classified as Level 2 and significant unobservable inputs for derivative instruments classified as Level 3 as of June 30. IFC's credit curve and swaption volatility matrix. Derivative instruments . The significant unobservable inputs in the valuation of this structure are the correlations between and the weights of the constituents of the inflation index. June 30.9 * In case of valuation techniques with multiple significant inputs. foreign exchange rate volatility. volatility and dividend yield. Fair values for derivative instruments are derived by determining the present value of estimated future cash flows using appropriate discount rates and option specific models where appropriate.The various classes of derivative instruments include interest rate contracts. interest rate and currency contracts.Page 82 INTERNATIONAL FINANCE CORPORATION _ 75 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Borrowings . inter-bank yield curves. equity spot price.6 Weighted average (%) 21. Certain over the counter derivatives in the liquid asset portfolio priced in-house are classified as Level 2. foreign exchange contracts. 2013 and June 30. 2012 are presented below: Level 2 derivatives Interest rate contracts Foreign exchange Interest rate and currency rates Significant Inputs Inter-bank yield curves. Foreign exchange rate. equity contracts and other derivative contracts. while certain over the counter derivatives priced using external manager prices are classified as Level 3.70. foreign exchange basis curve and yield curves specified to index floating rates.0 .1 Weighted average (%) 34. inter-bank yield curves and foreign exchange basis curve.Fair values derived by using quoted prices in active markets are classified as Level 1.5 Level 3 derivatives Equity related derivatives Other derivatives Total June 30. Foreign exchange rate. As of June 30. The significant inputs used in valuing borrowings classified as Level 2 are presented below: Classes Structured bonds Unstructured bonds Significant Inputs Foreign exchange rate and inter-bank yield curves. the range and weighted average are not provided . 2013 Fair value (US$ millions) Type Fixed strike price options $ 38 Variable strike price options 742 Other techniques 1 Inflation index linked note (26) $ 755 Level 3 derivatives Equity related derivatives Borrowing related structured currency swap Total Significant inputs Volatilities Contractual strike price* Inflation index weights and correlations Range (%) 1.4 -115. Fair values derived by determining the present value of estimated future cash flows using appropriate discount rates and option specific models where appropriate are classified as Level 2. 2013 IFC had four inflation index linked structured borrowing issues classified as level 3 with a total fair value of $391 million.

the range and weighted average are not provided.1 (5.7 2.2 5.1 .19.1 2.16. 2013 Fair value (US$ millions) Significant inputs $ 674 Cost of equity Asset growth rate Return on assets Perpetual growth rate 261 Price/book value 203 Discount for lock-up 271 96 1.0 9.24.1 11. .7 .1 .2 2.731 Discounted cash flows Relative valuations Listed price (adjusted) Recent transactions Other techniques Total others Total $ 318 174 29 156 138 815 5.2 Sector Banking and other financial institutions Valuation technique Discounted cash flows Total banking and other financial institutions AMC Funds Other funds Total funds Others Relative valuations Listed price (adjusted) Recent transactions Other techniques Range (%) 9.8 13.1.Equity investments valued using quoted prices in active markets are classified as Level 1.9) .7 8.0 1.051 Weighted average cost of capital Cost of equity Valuation multiples* Discount for lock-up 6.170.30.3 8.2) . 2013 and June 30.0 11. 2012 are presented below: June 30.11. The valuation techniques and significant unobservable inputs for equity investments classified as Level 3 as of June 30.0 1.76 _ Page 83 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Equity investments .0 Weighted average (%) 15.801 42 2.6.505 Net Asset Value Recent transactions Net Asset Value Recent transactions 886 2 1.2 .7 . Equity investments classified as Level 2 were valued using quoted prices in inactive markets.22.3 11.0 (14.0 Third party pricing * In case of valuation techniques with multiple significant inputs.5 .0 .

113.0 20.8 12.2 1.0) .4 2.16.2 .2.953 Weighted average cost of capital Cost of equity Valuation multiples* Discount for lock-up 6.1 (8.008 Net Asset Value Net Asset Value Recent transactions 491 1.5 .7 16. 2012 Fair value (US$ millions) Significant inputs $ 514 Cost of equity Asset growth rate Return on assets Perpetual growth rate 203 Price/book value 207 Discount for lock-up 70 14 1.6) .4 .1 10.4 5.284 Discounted cash flows Relative valuations Listed price (adjusted) Recent transactions Other techniques Total others Total $ 177 135 37 151 161 661 3.690 103 2.4 1.7 n/a 10.4 13.8 (34.0 5.Page 84 INTERNATIONAL FINANCE CORPORATION _ 77 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30.5 n/a Third party pricing Sector Banking and other financial institutions Valuation technique Discounted cash flows Total banking and other financial institutions AMC Funds Other funds Total funds Others Relative valuations Listed price (adjusted) Recent transactions Other techniques Weighted Range (%) average (%) 9.5 9.8 .5 n/a n/a n/a n/a * In case of valuation techniques with multiple significant inputs.27.1 3. .16.22.0 .11. the range and weighted average are not provided.0-18.7.9 6.8 .

.269 3.615 158 $ 5. Fair values of loan commitments are based on present value of loan commitment fees. 2012 are summarized below (US$ millions).916 252 2.677 1.376 120 18.261 $ 6.615 37 19.151 37.397 44.369 264 852 130 4.438 3.066 3.845 60 591 19. trading securities and securities purchased under resale agreements $ 37. 2012 Carrying Carrying amount Fair value amount Fair value Financial assets Cash and due from banks. 2013 and June 30.168 34. time deposits.261 Other investment-related financial assets comprise standalone options and warrants that do not meet the definition of a derivative. 2012).191 $ 37.309 1.665 627 223 281 130 1.838 1.June 30.78 _ Page 85 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair value of assets and liabilities Estimated fair values of IFC’s financial assets and liabilities and off-balance sheet financial instruments at June 30.151 34.669 627 223 281 130 1. The fair value of loan commitments amounted to $24 million at June 30.911 240 2.911 240 2. 2013 ($20 million .378 119 3.863 1.346 11.346 13.378 4.397 44.801 84 493 22.119 4.496 3.378 119 3.695 1.477 11.879 Investments: Loans at amortized cost.231 3.168 31.916 252 2.831 3.823 210 157 120 2.503 376 1.774 1. net of reserves against losses Loans held for sale at lower of amortized cost or fair value Loans accounted for at fair value under the Fair Value Option Total loans Equity investments at cost less impairment Equity investments accounted for at fair value as available-forsale Equity investments accounted for at fair value Total equity investments Debt securities accounted for at fair value as available-for-sale Debt securities accounted for at fair value under the Fair Value Option Total debt securities Total investments Derivative assets: Borrowings-related Liquid asset portfolio-related and other Investment-related Client risk management-related Total derivative assets Other investment-related financial assets Financial liabilities Securities sold under repurchase agreements and payable for cash collateral received Market and IBRD borrowings outstanding Derivative liabilities: Borrowings-related Liquid asset portfolio-related and other Investment-related Client risk management-related Total derivative liabilities 20.477 9.376 5 21.272 3.231 3.736 44. June 30.191 $ 36.733 4.736 44. 2013 June 30.127 5.452 84 591 20.503 376 1.310 $ 5.230 4.310 $ 6.823 210 157 120 2.879 $ 36.977 1.369 264 852 130 4.295 43 493 20.869 1.230 4.

129 17.731 2.490 3.735 446 41 1.997 38.151 343 2.930 Commercial mortgage-backed securities 601 601 Foreign residential mortgage-backed securities 19 2.798 24. Equity investments with fair value of $72 million transferred from level 1 to level 2 and $49 million from level 2 to level 1 due to decrease/increase in market activities.976 3.606 14.474 585 87 5 2. Bonds issued by IFC with a fair value of $1.098 6.798 24.533 5 3. 2012. which approximates fair value.945 3.Page 86 INTERNATIONAL FINANCE CORPORATION _ 79 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair value hierarchy The following tables provide information as of June 30. financial assets and financial liabilities are classified in their entirety based on the lowest level input that is significant to the fair value measurement (US$ millions): June 30.823 2.388 24.284 20.464 41 2.408 24.244 85 30.538 Foreign asset-backed securities 2.731 815 5.349 Loans (outstanding principal balance $474) Equity investments: Banking and non-banking financial institutions Insurance companies Funds Others Total equity investments Debt securities: Corporate debt securities Preferred shares Asset-backed securities Other debt securities Total debt securities Derivative assets: Interest rate contracts Foreign exchange Interest rate and currency Equity Others Total derivative assets Total assets at fair value Borrowings: Structured bonds Unstructured bonds Total borrowings (outstanding principal balance $43.359 2.576 1.924 446 41 1.798 $ $ $ 18 73 46 137 684 124 1. Note: For the year ended June 30.098 Foreign government obligations 6. .386 million.474 585 87 5 2.019 $ $ $ 493 1.090 million transferred from level 1 to level 2 due to change in information quality. 2013 Level 1 Level 2 Level 3 Total Trading securities: Money market funds $ 768 $ $ $ 768 Treasury securities 6. ** includes discount notes (not under the short-term Discount Note Program). 2013 and June 30. As required by ASC 820.491 6.359 Corporate bonds 4.787 780 1 3.787 2.669 229 1. about IFC’s financial assets and financial liabilities measured at fair value on a recurring basis. 2013. with a fair value of $768 million at June 30.300 Non-agency residential mortgage-backed securities 311 34 345 Collateralized debt and collateralized loan obligations 13 46 59 Total trading securities 21.151 780 1 781 8.927 42.351 8. with a fair value of $1.020* 9.491 Government guaranteed obligations 436 55 491 Supranational bonds 131 26 157 Municipal bonds 900 900 Agency bonds 170 2 172 Foreign agency bonds 893 893 Agency residential mortgage-backed securities 184 63 247 Asset-backed securities 3.051 1. with principal due at maturity of $2.797 2.281 2.310 45.561 391 391 26 26 417 $ $ $ 493 3.151 684 124 1.925 million as of June 30.245**) Derivative liabilities: Interest rate contracts Foreign exchange Interest rate and currency rates Total derivative liabilities Total liabilities at fair value $ $ $ 1.376 44. and trading securities with a fair value of $1 million were transferred from level 1 to level 2 due to decrease in market activity. 2013.595 11. 2013: trading securities with a fair value of $180 million transferred from level 2 to level 1 due to indications of improved market activity. with original maturities greater than one year.930 4.234 * includes securities priced at par plus accrued interest.

495 657 7 9 2. 2012.952 million were transferred from level 1 to level 2 due to change in information quality. .615 42. while bonds issued with a fair value of $1.970 394 112 28.576 874 1. with principal due at maturity of $3.627 42.145 2.191 275 3. and.708 1.219 36.444 $ 23.953 1.627* 1.183 19.444 Total 109 6.353 114 1.132 101 781 (91) 1.362 6.195 $ $ 14.026 73 874 1.780 1.116 4.523**) Derivative liabilities: Interest rate contracts Foreign exchange Interest rate and currency rates Equity price risk contracts Total derivative liabilities Total liabilities at fair value Level 1 $ 109 6.946 348 18 10.027 3.640 million as of June 30. trading securities with a fair value of $749 million were transferred from level 1 to level 2 due to decrease in market activity.091 69 13 61 143 905 174 3. which approximates fair value.261 44. with a fair value of $2. 2012.444 23. ** includes discount notes (not under the short-term Discount Note Program). 2012: trading securities with a fair value of $214 million were transferred from level 2 to level 1 due to indications of improved market activity. Equity investments with fair value of $116 million were transferred from level 1 to level 2 due to decrease in market activity.402 410 68 782 1.495 657 7 9 2.352 205 2.260 $ 20.436 38 301 4 171 62 3.284 661 3.284 1.662 $ $ $ $ 10 46 94 150 591 930 78 2.868 591 2. with a fair value of $109 million at June 30. Bonds issued by IFC with a fair value of $514 million were transferred from level 2 to level 1.282 1 1 1 $ $ $ $ Trading securities: Money market funds Treasury securities Foreign government obligations Government guaranteed obligations Supranational bonds Municipal bonds Agency bonds Foreign agency bonds Agency residential mortgage-backed securities Asset-backed securities Foreign asset-backed securities Corporate bonds Commercial mortgage-backed securities Foreign residential mortgage-backed securities Non-agency residential mortgage-backed securities Collateralized debt and collateralized loan obligations Total trading securities Loans (outstanding principal balance $607) Equity investments: Banking and non-banking financial institutions Insurance companies Funds Others Total equity investments Debt securities: Corporate debt securities Preferred shares Asset-backed securities Other debt securities Total debt securities Derivative assets: Interest rate contracts Foreign exchange Interest rate and currency rate Equity Other Total derivative assets Total assets at fair value Borrowings: Structured bonds Unstructured bonds Total borrowings (outstanding principal balance $42.790 1.265 2.168 418 2 420 7.80 _ Page 87 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30.612 $ $ 21.429 6.107 * includes securities priced at par plus accrued interest.362 6.020 213 1 3.219 13. with original maturities greater than one year.950 6. Note: For the year ended June 30.168 905 174 3.503 24 18.251 696 63 480 (95) 1. 2012 Level 2 Level 3 $ 14 1.229 million.116 418 2 4.867 6.846 410 68 782 1 1.239 23.

IFC’s policy is to recognize transfers in and transfers out at the beginning of the reporting period. 2013: Net unrealized gains and losses included in net income $ $ 5 $ $ 34 13 Collateralized loan and debt obligations $ 94 19 (4) (63) $ $ 46 18 $ $ Total $ 150 (5) 28 5 (9) (84) 85 31 (*)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2012 beginning balance as of June 30. 2013 and June 30.151 (53) 19 . issuances. 2013 For the year ended June 30. 2013. 2013 For the year ended June 30. 2012 $ 10 $ 46 Transfers out Level 3 (*) (5) Net gains and losses (realized and unrealized) in net income 9 Purchases. 2013: Net unrealized gains and losses included in net income Net unrealized gains and losses included in other comprehensive income $ $ $ 1. 2013 Corporate Preferred Asset securities shares backed securities Balance as of July 1. issuances. 2013: Net unrealized gains and losses included in net income Level 3 debt securities for the year ended June 30. 2013 Mortgage Asset backed backed securities securities Balance as of July 1. 2013 Balance as of July 1. Level 3 trading securities for the year ended June 30. 2013 For the year ended June 30.Page 88 INTERNATIONAL FINANCE CORPORATION _ 81 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following tables present the changes in the carrying value of IFC’s Level 3 financial assets and financial liabilities for the year ended June 30. sales and settlements: Purchases 387 50 86 Proceeds from sales (35) Settlements and others (408) (51) (6) Balance as of June 30. 2012 Net gains and losses (realized and unrealized) in: Net income Purchases. Level 3 loans for the year ended June 30. sales and settlements: Purchases 5 Sales (5) Settlements and others (21) Balance as of June 30.474 (1) 18 $ $ $ 585 (48) 2 $ $ $ 87 (1) $ Loans 591 38 141 (277) $ Total 591 38 141 (277) $ $ 493 38 $ $ 493 38 Others $ 9 (4) $ $ $ 5 (4) $ $ $ $ Total 2. 2012 $ 1.495 $ 657 $ 7 Net gains and losses (realized and unrealized) in: Net income (14) (37) Other comprehensive income 14 1 Purchases. 2012 (US$ millions). issuances. sales and settlements: Issuances Settlements and others Balance as of June 30.168 (55) 15 523 (35) (465) 2.

(**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2012 beginning balance as of June 30. 2012 $ 930 $ 78 $ 2. 2012 $ 418 Net gains and losses (realized and unrealized) in: Net income 93 Purchases.82 _ Page 89 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Level 3 equity investments for the year ended June 30. 2013 For the year ended June 30. 2013.464 39 50 $ $ $ 41 (8) 2 $ $ $ 2. 2013: Net unrealized gains and losses included in net income $ $ (391) 52 $ Unstructured - $ Total 52 (443) $ $ - $ $ (391) 52 . sales and settlements: Purchases 5 Settlements and others 264 Balance as of June 30. issuances. 2013 For the year ended June 30.051 (188) 57 (*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30. 2012 $ Net gains and losses (realized and unrealized) in: Net income 52 Purchases. sales and settlements: Purchases 322 21 713 Proceeds from sales (13) (316) Settlements and others 191 (1) 16 Balance as of June 30. 2013 For the year ended June 30. 2013: Net unrealized gains and losses included in net income Net unrealized gains and losses included in other comprehensive income $ $ $ 1. 2013 Structured Balance as of July 1. issuances. 2013 Equity Balance as of July 1.953 52 (149) (45) 51 1.284 Transfers into Level 3 (*) 52 Transfers out of Level 3 (**) (65) (51) Net gains and losses (realized and unrealized) in: Net income 4 (8) 34 Other comprehensive income 43 2 Purchases. issuances. 2013: Net unrealized gains and losses included in net income $ $ 780 78 $ Other 2 (1) - $ Total 420 92 5 264 $ $ 1 (2) $ $ 781 76 Level 3 bond liabilities for the year ended June 30.223 (348) 314 5.731 (142) - Others $ 661 (33) (75) 6 167 (19) 108 $ $ $ 815 (77) 5 $ $ $ $ Total 3. sales and settlements: Issuances (443) Balance as of June 30. 2013. 2013 Banking and Insurance Funds non-banking companies institutions Balance as of July 1. Level 3 derivative assets for the year ended June 30.

2013: Net unrealized gains and losses included in net income Level 3 trading securities for the year ended June 30. sales and settlements: Purchases 5 Settlements and others Balance as of June 30. 2011 Net gains and losses (realized and unrealized) in: Net income Purchases. issuances. 2012: Net unrealized gains and losses included in net income $ $ 10 $ $ 46 10 $ Interest rate and currency - $ Total (34) 8 (34) 8 $ $ (26) (34) $ $ (26) (34) Collateralized loan and debt obligations $ 103 13 (22) $ $ 94 12 $ Total 210 5 (56) 8 5 (22) $ $ 150 22 (*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30. 2012 For the year ended June 30. 2012 For the year ended June 30.495 (7) (171) $ $ $ 657 13 (38) $ $ $ 7 $ Loans 637 (13) 129 (162) $ Total 637 (13) 129 (162) $ $ 591 (14) $ $ 591 (14) $ Others 8 1 - $ Total 2. 2012 Net gains and losses (realized and unrealized) in: Net income Purchases. 2011 $ 1. 2013 For the year ended June 30. 2012 Balance as of July 1. sales and settlements: Purchases and other Balance as of June 30. 2012: Net unrealized gains and losses included in net income Level 3 debt securities for the year ended June 30. issuances. issuances. 2012 For the year ended June 30.Page 90 INTERNATIONAL FINANCE CORPORATION _ 83 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Level 3 derivative liabilities for the year ended June 30. 2011 $ 43 $ 64 Transfers into Level 3 (*) 5 Transfers out of Level 3 (**) (43) (13) Net gains and losses (realized and unrealized) in: Net income (5) Purchases. 2013 Balance as of July 1. Level 3 loans for the year ended June 30. 2012 Mortgage Asset backed backed securities securities Balance as of July 1. 2012. 2012 Asset backed Corporate Preferred securities securities shares Balance as of July 1. 2012. issuances. 2012: Net unrealized gains and losses included in net income Net unrealized gains and losses included in other comprehensive income $ $ $ 1. sales and settlements: Purchases 307 214 Proceeds from sales (56) Settlements and others (221) (6) (15) Balance as of June 30.620 $ 516 $ 22 Net gains and losses (realized and unrealized) in: Net income 10 27 Other comprehensive income (221) (38) Purchases. (**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2011 beginning balance as of June 30.168 7 (209) .166 38 (259) 521 (56) (242) $ $ $ 9 1 - $ $ $ 2. sales and settlements: Issuances Settlements and others Balance as of June 30.

519 million and $1. Level 3 derivative assets for the year ended June 30.year ended June 30.247 million . income from loans and guarantees. (**)Transfers out of Level 3 are due to availability of observable market data resulting from an increase in market activity for these securities or sales of some securities that were part of June 2011 beginning balance as of June 30. sales and settlements: Purchases 58 13 436 Proceeds from sales (28) (237) Settlements and others 58 12 Balance as of June 30. 2012 Equity Balance as of July 1. 2011 $ 390 Net gains and losses (realized and unrealized) in: Net income 40 Purchases.090 million were written down to their fair value of $938 million ($1.84 _ Page 91 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Level 3 equity investments for the year ended June 30. which was included in income from equity investments in the consolidated income statement during the year ended June 30.232 414 (169) (33) 57 645 (266) 73 $ $ $ 661 (6) 19 $ $ $ 3. sales and settlements: Purchases and issuances 8 Settlements and others (20) Balance as of June 30. 2012: Net unrealized gains and losses included in net income $ $ 418 70 $ Other 7 (5) - $ Total 397 35 8 (20) $ $ 2 (5) $ $ 420 65 Gains and losses (realized and unrealized) from trading securities. 2012: Net unrealized gains and losses included in net income Net unrealized gains and losses included in other comprehensive income $ $ $ 930 29 (3) $ $ $ 78 (2) 41 $ $ $ 2. 2012. 2012). . resulting in a loss of $152 million. 2012 For the year ended June 30. 2012). As of June 30. 2011 $ 566 $ 14 $ 2. equity investments.104 Transfers into Level 3 (*) 393 Transfers out of Level 3 (**) (110) Net gains and losses (realized and unrealized) in: Net income (4) (2) (19) Other comprehensive income (3) 41 Purchases. respectively. The amount of the write-down was based on a Level 3 measure of fair value. 2013 (loss of $272 million .953 (136) 57 (*) Transfers into Level 3 are due to lack of observable market data resulting from a decrease in market activity for these securities as of June 30. 2013. loans. income from equity investments and income from debt securities. 2012 For the year ended June 30. issuances.June 30. equity investments and debt securities included in net income for the period are reported on the consolidated income statement in income from liquid asset trading activities. 2012 Banking and non-banking Insurance institutions companies Funds Balance as of July 1. issuances.284 (157) - $ Others 548 21 (59) (8) 19 138 (1) 3 $ Total 3. with a carrying amount of $1. 2012. accounted for at cost less impairment.

715 26.438 584 7.500 9.695 523 14.300) (22.717 100 2. and borrowings in multiple currencies.200) 15. time deposits.525 $ 5.335 55. 2012 (US$ millions): June 30.695 2.922 6.918 15. 2013 US dollar $ 2.459 (1.133 2.965 17.321 $ 2.406 9.250 $ $ $ $ $ $ .037) $ 5.925 $ $ Euro 1.376 2.528 16.736 44.075 10.685 26 40 2. IFC’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. IFC’s equity investments in enterprises located in its developing member countries are typically made in the local currency of the country.630 337 16. 2013 and June 30. The following table summarizes IFC’s exposure in major currencies at June 30.817 537 577 7. trading securities.751 $ 15.174 $ Fair value and other adjustments $ (22.300) $ $ Assets Cash and cash equivalents Trading securities Securities purchased under resale agreements Investments: Loans Less: Reserve against losses on loans Net loans Equity investments Debt securities Total investments Derivative assets Receivables and other assets Total assets Liabilities Securities sold under repurchase agreements Borrowings Derivative liabilities Payables and other liabilities Total liabilities Total 6.310 2.Page 92 INTERNATIONAL FINANCE CORPORATION _ 85 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE S – CURRENCY POSITION IFC conducts its operations for loans.078 $ Other currencies $ 2.256 2.037) (23.151 34. equity investments.831 11.869 2.910 (210) 2.349 337 22.739 $ (23.346 42.505 30.461 2.476 $ 21 278 6.394 1.700 11. IFC carries the currency risk of equity investments and funds these investments from its capital and retained earnings.238 $ 45.623 425 43.874 365 25.648 $ $ Japanese yen 4 330 20 20 20 2.935 (218) 2.677 3. debt securities.833 1.009 1. As a matter of policy.628) 20.683 41 3.594 (1.281 77.

663 6.496 9.376 1.181 $ $ $ $ $ $ For management purposes. treasury services and advisory services.383 36 5. Advisory services are primarily assessed based on the level and adequacy of its funding sources (See Note V).120) 14.019 $ (22.287 15. The performance of investment services.811 2.877 (1.868 964 20.397 44. Consistent with internal reporting. the treasury services segment consists of the borrowing.194 $ $ Euro 1. IFC’s business comprises three segments: investment services. . The investment services segment also includes AMC.480 997 2.296) (22.252 $ 15.539 $ Assets Cash and cash equivalents Trading securities Securities purchased under resale agreements Investments Loans Less: Reserve against losses on loans Net loans Equity investments Debt securities Total investments Derivative assets Receivables and other assets Total assets Liabilities Securities sold under repurchase agreements Borrowings Derivative liabilities Payables and other liabilities Total liabilities NOTE T – SEGMENT REPORTING Fair value and other adjustments $ (22.615 2.496 (1.86 _ Page 93 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30.672 6.296) $ 6.832 36 5.034 16.492 634 27.359 30 (1) 29 29 3.665 1.893 10. IFC’s management reporting system and policies are used to determine revenues and expenses attributable to each segment.098) (22.833 1.397 18.761 $ 6.047 28. administrative expenses are allocated to each segment based largely upon personnel costs and segment headcounts.381) 19.774 812 13.034 727 40. return on assets. asset and liability management and client risk management activities.643 69 2.807 (164) 2.858 55.438 4. The investment services segment consists primarily of lending and investing in debt and equity securities. Transactions between segments are immaterial and.774 2.712 393 80 5. thus.662 $ $ Japanese yen 208 1.099 39. Further information about the impact of AMC on IFC’s consolidated balance sheets and income statements can be found in Note B.544 (96) 2. liquid asset management. and return on capital employed. are not a factor in reconciling to the consolidated data.871 89 5.979 $ 267 4.168 31.464 $ Other currencies $ 2.986 $ 46. Operationally.763 931 15.962 7.227 $ 3.448 9. Advisory services provide consultation services to governments and the private sector. 2012 US dollar $ 2.749 33 2.261 2.829 75.454 1. treasury services and advisory services is assessed by senior management on the basis of net income for each segment. Consistent with internal reporting.397 24. net income or expense from asset and liability management and client risk management activities in support of investment services is allocated from the treasury segment to the investment services segment. which is not separately disclosed due to its immaterial impact.098) $ $ Total 7.

guarantees and other receivables (243) (243) Income from equity investments 752 752 Income from debt securities 5 5 Income from liquid asset trading activities 500 500 Charges on borrowings (109) (111) (220) Advisory services income 239 239 Other income 202 202 Administrative expenses (781) (22) (42) (845) Advisory services expenses (351) (351) Expense from pension and other postretirement benefit plans (120) (6) (47) (173) Other expenses (32) (32) Foreign currency transaction gains and losses on non-trading activities 35 35 Income (loss) before net gains and losses on other non-trading financial instruments accounted for at fair value and grants to IDA 768 361 (201) 928 Net gains and losses on other non-trading financial instruments accounted for at fair value Realized gains 35 35 Gains on non-monetary exchanges 2 2 Unrealized gains 353 32 385 Income (loss) before grants to IDA 1. 2013.018 Income from loans and guarantees Provision for losses on loans. is provided below (US$ millions): June 30.658 (330) $ 1.350 Grants to IDA (340) (340) Net income (loss) 818 393 (201) 1. 2013 Investment Treasury Advisory services services services Total Income from loans and guarantees $ 1.Page 94 INTERNATIONAL FINANCE CORPORATION _ 87 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS An analysis of IFC’s major components of income and expense by business segment for the years ended June 30.457 81 (92) 179 (728) (68) (23) 145 1.772 11 10 (34) 1. guarantees and other receivables Income from equity investments Income from debt securities Income from liquid asset trading activities Charges on borrowings Advisory services income Other income Administrative expenses Advisory services expenses Expense from pension and other postretirement benefit plans Other expenses Foreign currency transaction gains and losses on non-trading activities Income (loss) before net gains and losses on other non-trading financial instruments accounted for at fair value and grants to IDA Net gains and losses on other non-trading financial instruments accounted for at fair value Realized gains Gains on non-monetary exchanges Unrealized losses Income (loss) before grants to IDA Grants to IDA Net income (loss) Investment services $ 938 (117) 1.059 Provision for losses on loans. June 30.457 81 313 (181) 269 179 (798) (290) (96) (23) 145 1.328 $ (8) .877 11 10 (240) 1.429 $ June 30.010 Less: Net loss attributable to noncontrolling interests 8 8 Net income (loss) attributable to IFC $ 826 $ 393 $ (201) $ 1.759 (330) $ 1.059 $ $ $ 1. 2012 and June 30. 2011.158 393 (201) 1. 2012 Treasury Advisory services services $ 313 (89) 269 (23) (47) (290) (3) (25) 198 (206) (8) (93) (93) $ (93) $ Total 938 (117) 1.

712 million at June 30. which IFC does not consolidate because it does not absorb the majority of funds’ expected losses or expected residual returns and (b) entities whose total equity investment is considered insufficient to permit such entity to finance its activities without additional subordinated financial support or whose activities are so narrowly defined by contracts that equity investors are considered to lack decision making ability. as appropriate.797 (600) $ 1. 2012). and the composition of Liquid Assets is provided in Note C.464 46 529 (140) 222 (700) (153) (109) (19) (33) 2. including committed funding.June 30. debt securities. where the general partner or fund manager does not have substantive equity at risk.June 30.579 Geographical segment data in respect of investment services is disclosed in Note D. 2012). in which IFC is deemed to hold significant variable interests. IFC’s interests in these VIEs are recorded on IFC’s consolidated balance sheet primarily in equity investments. Based on the most recent available data of these VIEs. 2013 ($3. and other liabilities. 2013 ($18. The majority of these VIEs do not involve securitizations or other types of structured financing. the balance sheet size. 2012).197 $ - $ Total 877 (26) (153) (25) (204) (204) (204) $ 40 1.143 million . .464 46 (109) 222 (665) (80) (19) (33) 1. which IFC does not consolidate because it does not have the power to control the activities that most significantly impact their economic performance.735 63 22 (23) 1.213 million .179 (600) 1. loans.810 million at June 30.88 _ Page 95 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30. 2013 (106 investments . 2011 Treasury Advisory services services 8 $ 529 (31) (9) (4) 493 93 586 $ 586 $ Income from loans and guarantees Release of provisions for losses on loans. guarantees and other receivables Income from equity investments Income from debt securities Income from liquid asset trading activities Charges on borrowings Other income Administrative expenses Advisory services expenses Expense from pension and other postretirement benefit plans Other expenses Foreign currency transaction gains and losses on non-trading activities Income (loss) before net gains and losses on other non-trading financial instruments accounted for at fair value and grants to IDA Net gains and losses on other non-trading financial instruments accounted for at fair value Realized gains Gains on non-monetary exchanges Unrealized gains (losses) Income (loss) before grants to IDA Grants to IDA Net income (loss) Investment services $ 869 40 1. guarantees and risk management arrangements. comprising both carrying value of investments and amounts committed but not yet disbursed.June 30. NOTE U – VARIABLE INTEREST ENTITIES Significant variable interests IFC has identified 139 investments in VIEs which are not consolidated by IFC but in which it is deemed to hold significant variable interests at June 30. was $4.024 63 22 70 2. These VIEs are mainly: (a) investment funds. IFC’s involvement with these VIEs includes investments in equity interests and senior or subordinated interests. IFC is usually the minority investor in these VIEs. IFC’s maximum exposure to loss as a result of its investments in these VIEs. totaled $22.

Latin America and Caribbean Total infrastructure and natural resources Maximum exposure to VIEs Loans $ 91 459 266 816 158 55 48 78 339 594 429 1. Middle East and North Africa Sub-Saharan Africa. agribusiness and services Asia Europe.712 Manufacturing. agribusiness and services Asia Europe. Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe. agribusiness and services Financial markets Asia Europe.213 . Latin America and Caribbean Other Total financial markets Infrastructure and natural resources Asia Europe. Latin America and Caribbean Total manufacturing. Latin America and Caribbean Total manufacturing.480 644 520 1.929 3. Middle East and North Africa Sub-Saharan Africa.081 2. Middle East and North Africa Sub-Saharan Africa. agribusiness and services Financial markets Asia Europe.259 Total 117 478 308 903 288 521 418 253 1. 2012 is as follows (US$ millions): Equity investments $ 7 18 42 67 69 263 208 1 541 42 39 28 109 $ 717 $ $ June 30.165 2. 2013 and June 30. Middle East and North Africa Sub-Saharan Africa. 2013 Debt securities Guarantees 19 1 20 201 41 159 401 8 4 14 26 447 $ $ 51 2 121 174 7 7 181 $ Risk management $ 10 15 25 48 35 83 108 $ $ Manufacturing. 2012 Debt securities Guarantees 4 3 7 85 55 122 262 33 2 25 60 329 $ $ 1 1 8 8 9 Risk management $ 13 13 72 15 87 $ 100 $ $ Total 97 317 171 585 77 183 232 207 699 787 511 631 1. Latin America and Caribbean Total infrastructure and natural resources Maximum exposure to VIEs Loans $ 93 284 140 517 20 56 62 72 210 721 406 556 1.683 $ 2.Page 96 INTERNATIONAL FINANCE CORPORATION _ 89 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The industry sector and geographical regional analysis of IFC’s maximum exposures as a result of its investment in these VIEs at June 30.104 $ 3.410 Equity investments $ 30 31 61 57 42 114 213 33 31 27 91 $ 365 $ $ June 30. Middle East and North Africa Sub-Saharan Africa. Middle East and North Africa Sub-Saharan Africa.329 4.

2012 is as follows (US$ millions): Carrying value of investments $ 2. publicprivate partnerships. which is not commingled with IFC’s other liquid assets and is reported at fair value in other assets.052 213 39 $ 1. The comingled funds are held in a separate liquid asset investment portfolio managed by IBRD.June 30.207 504 447 181 69 $ 3. IFC administers donor funds through trust funds.90 _ Page 97 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The carrying value of investments and maximum exposure to VIEs at June 30.213 $ NOTE V – ADVISORY SERVICES IFC provides advisory services to government and private sector clients through four business lines: access to finance. 2012) of refundable undisbursed donor funds. investment climate.408 June 30. and other advisory services initiatives. other assets include undisbursed donor funds of $391 million ($406 million .378 June 30.259 717 447 181 108 4. Donor funds are refundable until expended for their designated purpose.June 30. As of June 30.749 212 329 9 79 $ 2. . Donor funds are restricted for purposes specified in agreements with the donors. 2013 and June 30. IFC’s funding for advisory services are made in accordance with terms approved by IFC’s Board. Donor funds under administration and IFC’s funding can be comingled in accordance with administration agreements with donors. The donor funds may be used to support feasibility studies.304 Maximum exposure 3. project preparation. Included in other liabilities as of June 30. 2013 Committed but not yet disbursed $ 1. 2013.410 365 329 9 100 3. 2012). 2012 Committed but not yet disbursed $ 661 153 21 $ 835 $ Maximum exposure 2. 2013 is $391 million ($406 million .June 30. 2012) and IFC’s advisory services funding of $170 million ($196 million .712 Investment category Loans Equity investments Debt securities Guarantees Risk management Maximum exposure to VIEs $ $ Investment category Loans Equity investments Debt securities Guarantees Risk management Maximum exposure to VIEs Carrying value of investments $ 1. IFC funds this business line by a combination of cash received from government and other donors and IFC’s operations via retained earnings and operating budget designations as well as fees received from the recipients of the services. and sustainable business.

2012 and June 30 2011 (US$ millions): 2013 116 101 (141) 1 36 113 $ $ SRP 2012 87 112 (150) 2 6 57 $ $ 2011 78 109 (137) 1 20 71 $ $ 2013 25 17 (18) 2 9 35 $ $ RSBP 2012 17 17 (18) 4 20 $ $ 2011 16 16 (16) * 6 22 $ $ 2013 11 7 * 7 25 $ $ PEBP 2012 9 6 * 4 19 $ $ 2011 8 5 * 3 16 Benefit cost Service cost $ Interest cost Expected return on plan assets Amortization of prior service cost Amortization of unrecognized net loss Net periodic pension cost (income) $ * Less than $0. negative funded status is included in Payables and other liabilities under liabilities under retirement benefits plans. and funded status associated with the SRP. fair value of plan assets. RSBP. 2012 and June 30.5 million The expenses for the SRP. were allocated to IFC.812 $ $ 2013 416 25 17 2 * 2 (7) (22) 433 294 2 23 28 (7) 340 (93) 433 $ RSBP $ 2012 305 17 17 2 25 (6) 56 416 266 2 6 26 (6) 294 (122) 416 $ $ 2013 175 11 7 1 (5) 6 195 (195) 163 $ PEBP $ 2012 127 9 7 * (6) 38 175 (175) 148 Projected benefit obligations Beginning of year Service cost Interest cost Participant contributions Federal subsidy received Plan amendments Benefits paid Actuarial loss (gain) End of year Fair value of plan assets Beginning of year Participant contributions Actual return on assets Employer contributions Benefits paid End of year Funded status* Accumulated benefit obligations * Positive funded status is reflected in Receivables and other assets under prepaid pension and other postretirement benefit cost.166 87 112 27 (100) 355 2. Since the assets for the PEBP are not held in an irrevocable trust separate from the assets of IBRD. The SRP provides pension benefits and includes a cash balance plan. The assets of the PEBP are invested in fixed income and equity instruments. respectively. June 30.613 (90) $ 1.647 2. 2013 and June 30.431 30 183 75 (106) 2. For the years ended June 30.347 27 94 63 (100) 2. 2013. in Note J. 2012 (US$ millions). The RSBP provides certain health and life insurance benefits to eligible retirees. 2013 $ 2. The following table summarizes the benefit costs associated with the SRP. Contributions to these plans are calculated as a percentage of salary. IFC and MIGA reimburse IBRD for their proportionate share of any contributions made to these plans by IBRD. they do not qualify for off-balance sheet accounting and are therefore included in IBRD's investment portfolio. 2013. assets and liabilities of the plans. The amounts presented below reflect IFC’s respective share of the costs. RSBP. June 30. and PEBP for IFC for the years ended June 30.Page 98 INTERNATIONAL FINANCE CORPORATION _ 91 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE W – PENSION AND OTHER POSTRETIREMENT BENEFITS IBRD. IFC uses a June 30 measurement date for its pension and other postretirement benefit plans. expenses for these plans of $173 million. All costs. in Note L . assets and liabilities associated with these plans are allocated between IBRD. and PEBP allocated to IFC for the years ended June 30. The following table summarizes the projected benefit obligations. The PEBP provides certain pension benefits administered outside the SRP. IDA. IFC and MIGA participate in a defined benefit Staff Retirement Plan (SRP).647 116 101 30 (106) (85) 2. a Retired Staff Benefits Plan (RSBP) and a Post-Employment Benefits Plan (PEBP) that cover substantially all of their staff members.918 $ SRP $ 2012 2. Costs allocated to IBRD are then shared between IBRD and IDA based on an agreed cost-sharing ratio.703 2.431 (216) 1. RSBP. and PEBP are included in expense from pension and other postretirement benefit plans. 2011. IFC has recognized a receivable (prepaid asset) from IBRD and a payable (liability) to IBRD equal to the amount required to support the plan. IFC and MIGA based upon their employees’ respective participation in the plans. $96 million and $109 million.

The effect of this change was a $2 million increase to the projected benefit obligation at June 30. 2013. past experience. inflation expectations. and management’s best estimate of future benefit changes and economic conditions. During the fiscal year ended June 30. The expected long-term rate of return for the SRP assets is a weighted average of the expected long-term (10 years or more) returns for the various asset classes. the unrecognized gains and losses are amortized over the expected average remaining service lives of the employee group. and risk premium/spread (as appropriate). Amortization of these unrecognized gains and losses will be included in income if. Actuarial gains and losses occur when actual results are different from expected results. expected real earnings growth and expected long-term dividend yield. 2013. These included: (i) Providing reimbursements for standard and income related premiums paid by eligible Medicare B participants effective on July 1. Bond returns are generally developed as the sum of expected inflation. The discount rate used in determining the benefit obligation is selected by reference to the year-end yield of AA corporate bonds. 2013. 2012. weighted by the portfolio allocation. Other asset class returns are derived from their relationship to equity and bond markets. If required. amendments were made to the RSBP. at the beginning of the fiscal year.92 _ Page 99 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the fiscal year ended June 30. The combined effect of these changes was a $25 million increase to the projected benefit obligation at June 30. The following tables present the amounts included in Accumulated other comprehensive income relating to Pension and Other Postretirement Benefits (US$ millions): Amounts included in Accumulated other comprehensive income in the year ended June 30. 2014 are as follows (US$ millions): Net actuarial loss Prior service cost Net amount recognized in accumulated other comprehensive loss * Less than $0. (ii) moving from the current Retiree Drug Subsidy (RDS) arrangement to an Employer Group Waiver Plan (EGWP) effective January 1. 2012: Net actuarial loss Prior service cost Net amount recognized in accumulated other comprehensive loss $ $ SRP 648 4 652 $ $ RSBP 151 25 176 $ $ PEBP 108 1 109 $ $ Total 907 30 937 The estimated amounts that will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit cost in the fiscal year ending June 30.5 million $ $ SRP 20 1 21 $ $ RSBP 5 3 8 $ $ PEBP 7 * 7 $ $ Total 32 4 36 Assumptions The actuarial assumptions used are based on financial market interest rates. IFC decided not to transition the RSBP plan from RDS to EGWP following further evaluations of the design and administrative requirements of the EGWP. (iii) providing reimbursements of Medicare Part D income-related premium amounts once the plan moved to the EGWP arrangement and (iv) eliminating the Medicare savings feature. 2012. The expected longterm rate of return for the RSBP is computed using procedures similar to those used for the SRP. 2012. Changes in these assumptions will impact future benefit costs and obligations. . they exceed 10 percent of the greater of the projected benefit obligation or the marketrelated value of plan assets. real bond yield. Equity returns are generally developed as the sum of expected inflation. 2013: Net actuarial loss Prior service cost Net amount recognized in accumulated other comprehensive loss $ $ SRP 485 3 488 $ $ RSBP 115 25 140 $ $ PEBP 108 108 $ $ Total 708 28 736 Amounts included in Accumulated other comprehensive income in the year ended June 30. Asset class returns are developed using a forward-looking building block approach and are not strictly based on historical returns.

2012 and June 30.75 6.90 5.. 2013.70 SRP 2012 3. which has liabilities that can be projected based on the actuarial assumptions.40 SRP 2012 5. The key long-term objective is to target and secure asset performance that is reasonable in relation to the growth rate of the underlying liabilities and the assumed sponsor contribution rates.30 3.30 5.00 2022 2011 6.40 2011 5. 2011: Weighted average assumptions used to determine projected benefit obligation (%) 2013 4. The SAA is comprised of a diversified portfolio drawn from among fixed-income. equity.00 4.90 5.e.60 2022 2011 5.90 5.90 3.75 6.90 Discount rate Rate of compensation increase Health care growth rates . The following table shows the effects of a one-percentage-point change in the assumed healthcare cost trend rate (US$ millions): Effect on total service and interest cost Effect on projected benefit obligation Investment Strategy The investment policies establish the framework for investment of the plan assets based on long-term investment objectives and the trade-offs inherent in seeking adequate investment returns within acceptable risk parameters.75 6.50 6.70 6.20 5.90 2022 RSBP 2012 4.00 2022 2013 4.10 6. and the relatively modest liquidity needs over the short-term to pay benefits and meet other cash requirements.40 5.at end of fiscal year Ultimate health care growth rate Year in which ultimate rate is reached The medical cost trend rate can significantly affect the reported postretirement benefit income or costs and benefit obligations for the RSBP.30 6.25 2022 2013 3.30 3.00 7. The SAA is derived using a mix of quantitative analysis that incorporates expected returns and volatilities by asset class as well as correlations across the asset classes.90 5.10 6.50 5.90 4. The SAA for the plans is reviewed in detail and reset about every three years.90 2011 5.90 2011 5.80 5.40 2011 5. June 30.20 2013 4. A key component of the investment policy is to establish a Strategic Asset Allocation (SAA) representing the policy portfolio (i.80 5.at end of fiscal year Ultimate health care growth rate Year in which ultimate rate is reached Weighted average assumptions used to determine net periodic pension cost (%) 2013 3.20 5.Page 100 INTERNATIONAL FINANCE CORPORATION _ 93 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following tables present the weighted-average assumptions used in determining the projected benefit obligations and the net periodic pension costs for the years ended June 30. real assets and absolute return strategies. This is particularly so in the case of the SRP. $ $ One-percentage-point increase 12 109 One-percentage-point decrease $ (9) $ (82) .90 4. the focus of the investment strategy is on generating sustainable long-term investment returns through various asset classes and strategies including public and private equity and real estate.75 7.40 PEBP 2012 5. with more frequent reviews and changes if and as needed based on market conditions.10 6.20 Discount rate Expected return on plan assets Rate of compensation increase Health care growth rates .90 2013 4.50 6. Given the relatively long investment horizons of the SRP and RSBP.70 PEBP 2012 3.60 2022 RSBP 2012 5. and qualitative considerations such as the desired liquidity needs of the plans. target mix of assets) around which the plans are invested.60 5.

Target Allocation 2013 (%) 27 26 20 10 12 5 100 SRP % of Plan Assets 2013 30 28 18 12 12 100 2012 24 33 20 11 12 100 Target Allocation 2013 (%) 29 24 20 10 12 5 100 RSBP % of Plan Assets 2013 30 29 21 9 11 100 2012 27 32 24 8 9 100 Asset class Public equity Fixed income & cash Private equity Hedge funds Real assets* Opportunistic** Total * Real assets include public and private real estate. In spite of such level of diversification. The plans mitigate operational risk by maintaining a system of internal controls along with other checks and balances at various levels. Significant concentrations of risk in Plan assets The assets of the SRP and RSBP are diversified across a variety of asset classes. is carried out on a regular basis as part of the risk monitoring process. Risk management for different asset classes is tailored to their specific characteristics and is an integral part of the external managers’ due diligence and monitoring processes. managers. Monitoring of performance (at both manager and asset class levels) against benchmarks. Credit risk is monitored on a regular basis and assessed for possible credit event impacts. These measures are used to define the risk tolerance level and establish the overall level of investment risk. Stress tests are performed periodically using relevant market scenarios to assess the impact of extreme market events. infrastructure and timber. Investment risk is regularly monitored at the absolute level. equity market risk remains the primary source of the overall return volatility of the Plans. Liability driven investment management and asset diversification are central to the overall investment strategy and risk management approach for the SRP. . 2012 by asset category for the SRP and RSBP. Risk management practices Managing investment risk is an integral part of managing the assets of the Plans. and compliance with investment guidelines. geographies and sectors. manager benchmarks. to limit the impact of any individual investment. ** Opportunistic strategies are designed to take advantage of temporary market opportunities that are not captured in other parts of portfolio. In addition. The surplus volatility risk (defined as the annualized standard deviation of asset returns relative to that of liabilities) and downside risk measures are considered key indicators of the Plan’s overall investment risk. the long-term cash flow needs of the Plans are considered during the SAA exercise and are one of the main drivers in determining maximum allocation to the illiquid investment vehicles. and liabilities of the Plans. The liquidity position of the Plans is analyzed at regular intervals and periodically tested using various stress scenarios to ensure that the Plans have sufficient liquidity to meet all cash flow requirements. The target allocations for SRP and RSBP were last revised in May 2013.94 _ Page 101 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table presents the actual and target asset allocation at June 30. Investments in these asset classes are further diversified across funds. 2013 and June 30. as well as at the relative levels with respect to the investment policy. strategies.

$ * * * * 491 68 174 733 $ 9 15 699 27 9 49 808 73 240 107 57 477 140 491 241 (1) 239 36 2. 2012 (US$ millions): June 30. 2013 and June 30.$ 3 38 41 8 33 9 3 53 1 * 95 $ 4 $ 49 3 1 1 58 28 16 (*) 2 104 $ . net Total Assets Level 1 $ . 2013 Fair value measurements on a recurring basis SRP RSBP Level 2 Level 3 Total Level 1 Level 2 Level 3 * $ 55 513 568 88 419 27 56 590 * $ 1.158 $ 40 $ 119 25 14 32 230 226 205 2 76 (*) 739 $ .431 $ $ . net Total Assets Level 1 $ Total 6 4 88 2 * * 100 7 52 7 6 72 37 71 29 * 29 2 340 Debt securities Time deposits Securities purchased under resale agreements Government and agency securities Corporate and convertible bonds Asset-backed securities Mortgage-backed securities Total debt securities Equity securities US common stocks Non-US common stocks Mutual funds Real estate investment trusts Total equity securities Commingled funds Private equity Hedge funds Derivative assets/ liabilities Real estate (including Infrastructure and timber) Other assets/ liabilities**. 2012 Fair value measurements on a recurring basis SRP RSBP Level 2 Level 3 Total Level 1 Level 2 Level 3 9 $ 104 27 9 49 198 140 173 (1) 65 * 575 $ .613 $ $ * $ 4 35 39 7 52 7 6 72 (*) 111 $ 6 $ 53 2 * * 61 37 21 * 6 125 $ .087 $ June 30.$ 15 595 610 73 240 107 57 477 (*) $ 1.$ * * * 67 7 21 95 $ Total 4 3 87 3 1 1 99 8 33 9 3 53 28 67 23 1 23 294 *Less than $0.$ 71 8 23 102 $ Debt securities Time deposits Securities purchased under resale agreements Government and agency securities Corporate and convertible bonds Asset-backed securities Mortgage-backed securities Total debt securities Equity securities US common stocks Non-US common stocks Mutual funds Real estate investment trusts Total equity securities Commingled funds Private equity Hedge funds Derivative assets/ liabilities Real estate (including infrastructure and timber) Other assets/ liabilities**.Page 102 INTERNATIONAL FINANCE CORPORATION _ 95 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair value measurements and disclosures All plan assets are measured at fair value on recurring basis.5 million ** Includes receivables and payables carried at amounts that approximate fair value .$ 483 79 181 743 $ 40 55 632 25 14 32 798 88 419 27 56 590 226 483 284 2 257 (27) 2. The following table presents the fair value hierarchy of major categories of plans assets as of June 30.

$ * $ (*) .5 million Total 733 100 (7) (82) 11 (12) 743 $ Corporate and convertible debt Beginning of the fiscal year Actual return on plan assets: Relating to assets still held at the reporting date Relating to assets sold during the period Purchase.$ . net Transfer in Transfer out Balance at end of fiscal year * Less than $0.5 million June 30.$ * $ (*) . net Transfer in Transfer out Balance at end of fiscal year * Less than $0. 2013 RSBP: Fair value measurements using significant unobservable inputs Assetbacked securities . 2013 and June 30. issuances and settlements. investments in certain real estate funds that were identified as redeemable within 90 days of the period end were transferred out of Level 3 into Level 2.$ Private equity 491 $ 92 (22) (78) 483 $ Real estate 174 $ 2 15 (10) 181 $ Hedge funds 68 6 * 6 11 (12) 79 $ $ Corporate and convertible debt Beginning of the fiscal year Actual return on plan assets: Relating to assets still held at the reporting date Relating to assets sold during the period Purchase.96 _ Page 103 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following tables present a reconciliation of Level 3 assets held during the year ended June 30.$ Mortgagebacked securities * $ (*) .$ Private equity 67 $ 14 (3) (7) 71 $ Real estate 21 $ * 2 (*) 23 $ Hedge funds 7 $ 1 * 1 1 (2) 8 $ Total 95 15 (1) (6) 1 (2) 102 $ $ . June 30. 2012. For the fiscal year ended June 30. 2012 (US$ millions). 2013 SRP: Fair value measurements using significant unobservable inputs Assetbacked securities * $ * (*) (*) $ . issuances and settlements.$ Mortgagebacked securities * $ * (*) (*) .

. Unless quoted prices are available. net Transfer in Transfer out Balance at end of fiscal year * Less than $0. issuances and settlements.S. issuances and settlements. interest rates.5 million June 30. Asset classes in the table above are grouped by the characteristics of the investments held. Some debt securities are valued using techniques which require significant unobservable inputs. The asset class break-down in the Investment Strategy section is based on management’s view of the economic exposures after considering the impact of derivatives and certain trading strategies. The selection of these inputs may involve some judgment. money market instruments and securities purchased under resale agreements are reported at face value which approximates fair value. U. It is important to note that the investment amounts in the asset categories shown in the table above may be different from the asset category allocation shown in the Investment Strategy section of the note. debt obligations of foreign governments and debt obligations in corporations of domestic and foreign issuers. Management believes its estimates of fair value are reasonable given its processes for obtaining securities prices from multiple independent third-party vendors. 2012 RSBP: Fair value measurements using significant unobservable inputs Assetbacked securities . fair values are based on discounted cash flow models using market-based parameters such as yield curves. If quoted market prices are not available.$ * * (*) $ * $ 5 $ (*) * (5) (*) * $ Mortgagebacked securities 3 $ 1 (1) (2) * (1) * $ Private equity 475 $ (42) 40 18 491 $ Real estate 139 $ 4 6 25 174 $ Hedge funds 61 $ (1) (1) 11 4 (6) 68 $ Corporate and convertible debt Beginning of the fiscal year Actual return on plan assets: Relating to assets still held at the reporting date Relating to assets sold during the period Purchase. as well as the valuation methodologies and inputs used to determine the fair value of each major category of Plan assets. volatilities. treasuries and agencies. where available. and applying its approach consistently from period to period.5 million Total 683 (38) 44 47 4 (7) 733 $ Corporate and convertible debt Beginning of the fiscal year Actual return on plan assets: Relating to assets still held at the reporting date Relating to assets sold during the period Purchase.$ Valuation methods and assumptions The following are general descriptions of asset categories.Page 104 INTERNATIONAL FINANCE CORPORATION _ 97 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30. These securities are valued by independent pricing vendors at quoted market prices for the same or similar securities. Fixed income also includes investments in asset backed securities such as collateralized mortgage obligations and mortgage backed securities. 2012 SRP: Fair value measurements using significant unobservable inputs Assetbacked securities .$ * $ (*) (*) (*) (*) * $ Mortgagebacked securities * $ * * (*) (*) * $ Private equity 66 $ (5) 6 * 67 $ Real estate 17 $ 3 2 (1) 21 $ Hedge funds 6 $ (*) (*) 2 * (1) 7 $ Total 89 (2) 8 1 * (1) 95 $ $ . net Transfer in Transfer out Balance at end of fiscal year * Less than $0. foreign exchange rates and credit curves. Debt securities Debt securities include time deposits. ensuring that valuation models are reviewed and validated.

These investments do not have a readily determinable fair market value and are reported at NAVs provided by external managers or fund administrators (based on the valuations of underlying investments) on a monthly basis. The valuations of underlying investments are based on income and/or cost approaches or comparable sales approach. Europe and Asia in a variety of sectors. and reviewed by management.June 30. Investment in derivatives Investment in derivatives such as equity or bond futures. Investments in public equity listed on securities exchanges are valued at the last reported sale price on the last business day of the fiscal year. and reviewed by management. an index or currency exposure and rebalancing the portfolio. Reporting of those asset classes with a reporting lag. 2016 . and reviewed by management. Hedge fund investments Hedge fund investments include those seeking to maximize absolute returns using a broad range of strategies to enhance returns and provide additional diversification.June 30. 2014 . local market conditions among others. distressed investments and venture capital funds across North America. multi strategy and macro relative value strategies.5 million $ 109 117 126 135 145 872 $ RSBP Before Federal subsidy 7 $ 8 9 10 11 77 Federal subsidy PEBP * * * * * 2 $ 9 10 11 12 13 81 . 2014 July 1. swaps. and opportunistic equity investments. 2016 July 1. Commingled funds Commingled funds are typically common or collective trusts reported at net asset value (NAV) as provided by the investment manager or sponsor of the fund based on valuation of underlying investments. 2015 . 2015 July 1. 2018 July 1. The expected benefit payments are based on the same assumptions used to measure the benefit obligation at June 30. options and currency forwards are used to achieve a variety of objectives that include hedging interest rates and currency risks. operating results. taking into consideration the latest audited financial statements of the funds. Investments in hedge funds and commingled funds can typically be redeemed at NAV within the near term while investments in private equity and most real estate are inherently long term and illiquid in nature with a quarter lag in reporting by the fund managers. management estimates are based on the latest available information taking into account underlying market fundamentals and significant events through the balance sheet date. Hedge Funds include investments in equity.98 _ Page 105 INTERNATIONAL FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Equity securities Equity securities. The underlying investments are valued using inputs such as cost. discounted future cash flows and trading multiples of comparable public securities. including Real estate investment trusts (REITS). Over-the-counter derivatives are reported using valuations based on discounted cash flow methods incorporating market observable inputs. 2023 * Less than $0. are invested in companies in various industries and countries.June 30. event driven. Private Equity investments do not have a readily determinable fair market value and are reported at NAV provided by the fund managers.June 30. Estimated future benefits payments The following table shows the benefit payments expected to be paid in each of the next five years and subsequent five years. gaining desired market exposure of a security. 2017 July 1. taking into consideration the latest audited financial statements of the funds. 2018 . Real estate investments do not have a readily determinable fair market value and are reported at NAV provided by the fund managers. 2013 (US$ millions): SRP July 1. TBA securities. fixed income. value add. and taking into account discount and capitalization rates. and reviewed by management. taking into consideration the latest audited financial statements of the funds. A large number of these funds are in the investment phase of their life cycle. Private equity Private equity includes investments primarily in leveraged buyouts. 2017 . 2013 . Real estate Real estate includes several funds which invest in core real estate as well as non-core type of real estate investments such as debt. financial conditions.June 30.June 30.

2011). administrative support.year ended June 30. 2012. $50 million . Other chargebacks include $30 million for the year ended June 30. chargebacks and allocated charges. The best estimate of the amount of contributions expected to be paid to the SRP and RSBP for IFC during the year beginning July 1. were $60 million ($57 million . 2013. as determined by the Pension Finance Committee. results of operations or cash flows. 2013 is $88 million and $33 million. This includes shared costs of the Boards of Governors and Directors.year ended June 30. IFC’s Management does not believe the outcome of any of the various existing legal actions will have a material adverse effect on IFC’s financial position. NOTE Y – CONTINGENCIES In the normal course of its business. Expenses allocated to IFC for the year ended June 30. $26 million . . supplies. NOTE X – SERVICE AND SUPPORT PAYMENTS IFC obtains certain administrative and overhead services from IBRD in those areas where common services can be efficiently provided by IBRD. and other services such as communications. respectively. IFC is from time to time named as a defendant or co-defendant in various legal actions on different grounds in various jurisdictions.Page 106 INTERNATIONAL FINANCE CORPORATION _ 99 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Expected contributions IFC’s contribution to the SRP and RSBP varies from year to year. 2011). 2012. where chargeback is not feasible. internal auditing.year ended June 30. Although there can be no assurances. based on the information currently available.year ended June 30. IFC makes payments for these services to IBRD based on negotiated fees. which bases its judgment on the results of annual actuarial valuations of the assets and liabilities of the SRP and RSBP. 2013 ($26 million . and insurance.

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Project Commitments
Fiscal Year 2013

This table includes projects signed and processed during FY13. All amounts are given in U.S. dollars, regardless of the currency of the transaction. Under the Global Trade Finance Program, IFC provides guarantee coverage of bank risk in emerging markets, where confirming banks need risk mitigation to support their export clients because of limited capacity for country and bank exposure.
NOTE ON CATEGORIZATION OF PROJECTS:

Projects are assigned a category of A, B, or C, according to their potential environmental and social impacts — o ​ r FI, in the case of investments through financial intermediaries that on-­ lend to clients whose projects may present environmental and social risks. A: Business activities with potential significant adverse environmental or social risks and/or impacts that are diverse, irreversible, or unprecedented. B: Business activities with potential limited adverse environmental or social risks and/or impacts that are few in number, generally site-­specific, largely reversible, and readily addressed through mitigation measures. C: Business activities with minimal or no adverse environmental or social risks and/or impacts. FI: Business activities involving investments in FIs or through delivery mechanisms involving financial intermediation. This category is further divided into: FI–1: when an FI’s existing or proposed portfolio includes, or is expected to include, substantial financial exposure to business activities with potential significant adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented. FI–2: when an FI’s existing or proposed portfolio consists of, or is expected to consist of, business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-­ specific, largely reversible, and readily addressed through mitigation measures; or includes a very limited number of business activities with potential significant adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented. FI–3: when an FI’s existing or proposed portfolio includes financial exposure to business activities that predominantly have minimal or no adverse environmental or social impacts.

000. Shanghai F-Road Commercial Services Co..000. Fullerton Credit Sichuan Ltd Guizhou Dushan Lidu Industry Development Co. Ltd Jiangxi Tianren Ecology Co.000.. Co.. China Everbright International Limited China Flooring Holding Company Limited Concord Medical Services Holdings Limited Daguan Jingyun Hydropower Industry Co. Ltd EDC China Holding Ltd ENN Energy Holdings Ltd.000 — 75.000 14..553.P.000. Ltd East Asia and Pacific Region ADM Asia Restructuring Facility Armstrong South East Asia Clean Energy Fund.000 20.000 20.P.000. Prasac Microfinance Institution China Anyou Biotechnology Group Company Limited Aqualyng Holding AS Bank of Beijing Bank of Deyang Bank of Jiangsu Bank of Shanghai Ltd. Ltd SNF (China) Flocculant Co.000.P. CHUEE Facility — Bank of Beijing CHUEE Facility — Bank of Nanjing China Environmental Fund III. Ulanbaatar.750.000.000 17.000 4...613 11.000 60.000.000 — 23.000.. Mongolia MCS Properties Limited Mongolia Opportunities Fund I.000 — — — — — — — — — 70.104 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) East Asia anD tHe Pacific Cambodia ACLEDA Bank Plc. Myanmar ACLEDA MFI Myanmar Co. Ltd New Hope Agriculture and Food Fund II.000.000 — — — — 10.750. Salamander Energy plc.000 13. Ltd. L. Ltd.000 4.P. FI-2 FI-3 B B FI FI FI-2 FI-2 FI FI-3 FI-2 FI-2 FI B A B A B B FI FI-2 FI A B B FI-1 FI-3 B B B FI-3 B A FI FI-2 FI FI-2 B FI-3 B B B B B B FI-2 B FI-2 FI-2 B FI B FI-2 FI-3 — 10.000 10.756.000 12. Suu JSC XacBank Ltd.000 30.624 24.000.750.000. Bayan Rongxing Village and Township Bank CFPA Microfinance Management Co. Ltd Yingjiang Menglang Hydropower Co.000 — — — 2.005.000 13.000 — — 27. Indonesia PT Bina Usaha Keluarga PT HARUM ALAM SEGAR PT MITRA ALAM SEGAR PT Moya Indonesia PT Moya Tangerang PT Tirta Alam Segar PT Wintermar Offshore Marine Tbk PT.000.000.000.000 40.000 — 20. Ltd Shanghai Fosun Pharmaceutical Group Co.000 50. Fullerton Credit Chongqing Ltd Fullerton Credit Hubei Ltd.937.853.. Limited Shandong Changlin Deutz-Fahr Machinery Co. L.000. L.000 — — — 30. L.. Bank Hana Indonesia Sayap Mas Utama Lao People’s Democratic Republic Mongolia Acleda Bank Lao Ltd Khan Bank of Mongolia.000.000. Aureos South-East Asia Fund II LP Lakeshore Capital Asia Ltd.902.000.936 9.000 8..560 6.750. Peak Reinsurance Holdings Limited Qingdao Jason Electric Co.000 . Ltd Muyuan Foodstuff Co.002 13.

000 8.ProJecT CommiTmenTs Fiscal Year 2013 _ 105 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) 4.071.000.750.000.105 40.000 13.000 9.000.000 81.000 10.631 40.000.765 4.000 — — — — — — — — — — — — — — — — — — 75.000 6.005.000 — 3.000 24.765 4.560 6.250.000 12.000.000 9.586.999.881 250.500.000 25.853.750.000.750.105 40.000 — — 11.000.000 25.553.030.516 70.000 50.000.950 75.000 25.000.151 — — — 2.000 6.178 70.950.183.723.000.000.999.000.000 — — — — — — — — — — — — — — — — — 100.936 9.000 — — — — — — — .000 20.252.631 40.000.750.768 — — — 229.000 8.323 — — 8.250.921 2.000 — — — — — — — — — — — — — — — — — — — — 13.869.000 — — 582.500.000 — — 5.000 20.927.932.750.273.607 — — — — — — — — 1.183.000 81.000.000.000 17.000 4.900.000 20.000.000 30.427 74.000.927.902.723.377.000 — — 13.000 25.324 13.245.000 10.000 27.000 14.694 — — — — — — — 74.000.427 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4.000.463 — — 70.347.000.151 60.613 11.768 10.750.586.071.000 20.000 3.950 — — — — — 8.000 20.000.000.000 8.000.000 20.000 5.252.000 30.500.500.000 — 7.463 57.000 100.881 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 5.000.000.245.000 3.178 — — — — 9.742.516 — — 250.000.000 40.000 — — — — — — — 57.750.227 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 10.000.742.756.000 13.950.624 24.000 229.273.000.000 — — 20.000 10.000 — 20.000.000.000 8.750.607 23.482.000.000.000 4.000.000 1.

436.393. Inc.o. Philippine Resources Savings Banking Corporation Thailand Bank of Ayudhya Public Company Limited Chalybs Cylinders Ltd.000 — — — 5. Saigon Thuong Tin Commercial Joint Stock Bank Vietnam International Commercial Joint Stock Bank Vietnam Joint Stock Commercial Bank for Industry and Trade Vietnam Technological and Commercial Joint Stock Bank Vina Eco Board Co.000.139.600 21. Croatia SAME DEUTZ-FAHR Zetelice D.200 50.000 26. Philippine Asset Growth One.000 — — — — — . Armenia ACBA-Credit Agricole Bank Closed Joint Stock Company Ameriabank CJSC Armeconombank Byblos Bank Armenia Euroterm Closed Joint Stock Company HSBC Bank Armenia cjsc Inecobank Lydian International Ltd Azerbaijan AccessBank AzeriGazbank DEMIRBANK OJSC Finca Azerbaijan LLC JSC Bank Respublika Belarus Belarusky Narodny Bank JSC BPS-BANK (Formerly Belpromstroibank) JSC Belgazprombank MINSK TRANSIT BANK Millex International Bosnia and Herzegovina Bekto Precisa d.992 — 200.274 24. Ltd.033 15.. Atlantic Trade d.o.000 2.479.000.000.000.000. Inc. Organica Water Inc.096.O.000. Georgia Bank of Georgia Clean Energy Invest AS JSC Bank Republic JSC MFO FINCA Georgia JSC m2 Real Estate FI-2 B FI-3 FI-3 FI C B FI FI-3 B FI-2 FI FI FI FI-2 FI C C FI B B B C B B B B B FI-2 A FI-3 FI-3 B 11.000 10.000 — — — 14.000 — — — 34.O. Inc. Sisecam Soda Lukavac Bulgaria Central Asia Region Central Europe Region Croatia Eurobank EFG Bulgaria AD Fawaz Abdulaziz Al Hokair & Co.000 B FI-2 FI-1 FI-2 FI FI-3 FI-3 FI B FI-3 FI C FI-3 C FI-2 C FI FI-2 FI FI-2 B 4.000.000.o.000 — — 15.350 — 365.106 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) East Asia anD tHe Pacific Papua New Guinea Avenell Engineering System Limited Bank South Pacific Bank of South Pacific Limited Philippines Navegar I L.600 20.000 — — — — 20. Ltd.000 10.155. Timor-Leste Vietnam Tuba Rai Metin An Binh Commercial Joint Stock Bank Asia Commercial Bank DongA Commercial Joint Stock Bank Methis Environmental Vietnam Co.000.312.800 — 25.o.000 — 20.500.o.806.o.000.000 11.P. Orient Commercial Joint Stock Bank SN Power Holdings Singapore. Philippine Asset Growth Two..000 500.000 — — — — — 400.200 — 4.000. Vjetroelektrana Jelinak d.515. EUrope anD Central Asia Albania Banka Credins SHA Bankers Petroleum Ltd.

350 26.281.000 25.704 300.162 15.250.435.312.792 — — — — — — — — 2.704 350.000 — — 15.191.000 454.590 — — — 2.415 5.452.077.059 — 78.033 15.000.351 — 3.000 34.000 25.000.568.000 2.000 1.ProJecT CommiTmenTs Fiscal Year 2013 _ 107 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — — — 20.000 20.000 38.000 — — 3.000.739.783 10.600 20.139.590 5.000.000 500.000 10.212 162.065.000.290.958.549.077.162 — 1.212 162.061 23.792 65.000 10.000.873 200.135.566 — — — 28.633 1.061 23.675.500.318.704 — — — 65.125 — — — — — — — — — — — — — — — — — — 4.873 — — — — — 26.000 8.200.000.479.000.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — 30.000 — — — — — — — — 50.873 25.958.200.218.096.675.000.613 4.000 — — — — — — — — — — — — — — 7.000 454.000 5.000 — — — — — — — — — 350.429.000 4.318.873 — — — — — — 700.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 1.401.000.992 15.636.114.000.000.065.452.000 4.633 1.000.125 20.393.000 1.611 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 11.600 38.704 — 218.613 4.000.000 2.911.856.289.435.176.739.000 78.025.000.415 25.600 22.064.949.191.415 5.000.000.423 400.280 — — — — — .200.423 — 38.366 — — — — — — — — — — — — 4.611 4.250.000.000.000 1.281.155.000 — 1.000 11.568.000 — 4.000 — — — — — — — 1.059 700.289.274 24.025.429.600 38.000 5.000 4.064.000.415 25.200 3.549.566 20.911.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — 300.200 50.417 10.000 26.135.515.800 28.351 365.000.949.000 14.000 2.

000.d.A. Beograd Grand Prom d.A.A.000.000 — — 10.335 — 10.095. A. Sti.525.000. GE Garanti Bank Patria Credit IFN SA UniCredit Tiriac Bank SA Russian Federation Almaz Capital Russia Fund II LP Asian-Pacific Bank (Open joint-stock company) Brunswick Rail Finance Limited CREDIT BANK OF MOSCOW (OJSC) CapMan Russia Fund II.000. CB Moldova Agroindbank SA Romania Banca Romaneasca S. Skopje Universal Investment Bank AD Skopje Moldova Aragvi Holding International Limited Bostavan Wineries. Former Yugoslav Republic of NLB Tutunska banka.825.689. Slovenia Southern Europe Region Droga Kolinska d.000.000 — — 31.000. Joint Stock Company Commercial Bank “Center-Invest” OAO Promsvyazbank OJSC Bank Saint Petersburg OJSC KKS-Group RosEvroBank Joint Stock Commercial Bank Samara region Sanoh Rus limited liability company Transcapitalbank ZAO Credit Evropa Bank ZAO Locko Bank ZAO Masterslavl Serbia Eurobank EFG a.240 — — 8.000. LP Chuvash Republic Elbrus Capital Fund II IFC Russian Bank Capitalization Fund.423.d. Slovenija European Fund for Southeast Europe Schwarz Group Tajikistan Turkey Open Joint Stock Company.d.000 — 70.123 37.039.100 29.108 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) EUrope anD Central Asia Joint Stock Company Kor Standard Bank TBC Bank Tetri Qudi LLC Kazakhstan Bank CenterCredit Eastcomtrans LLP MicroCredit Organization Arnur Credit LLP Subsidiary Bank Sberbank of Russia JSC Kosovo Kyrgyz Republic TEB Sh.022.000 — 30.000 — 1. LP IXcellerate Ltd.000 5. CJSC Finca Micro-Credit Company Kompanion Financial Group Microfinance CJSC Macedonia.076 29.A.131 — — — — 4. Ltd.400 — — — — — 30.D.558 — .781 — 30.000. Bank Eskhata Acwa Guc Elektrik Isletme ve Yonetim Sanayi ve Ticaret Ltd.237 — — 1.o. Denizbank Covered Bond Earlybird Digital East Fund 2012 SCA SICAR FI-2 FI B FI B FI-3 FI-2 FI-2 FI FI FI C C B B FI C FI-2 FI FI FI-3 FI-1 FI FI B FI FI-2 B FI-2 FI C FI-2 C C B C B B FI FI FI B FI B B B FI B FI A B FI-2 FI-2 7.000 — 125.000 69.846.000. Asyaport Liman A.d. Banca Transilvania S.143.000 — — — 25.500.637.855 — 64.618.o. Victoria Group a. Bancpost S.S.425.632 75.913 — 14.895.000 50.915. Skopje Stopanska Banka a.000 75.

102 120.111.245 1.000 — — — — — — — — — — — — — 20.100 29.507 — — 2.155.641.147 1.335 20.414.863.593.339 14.442.522 1.000 91.429 375.000 — — — — — — — — 1 252.000.000 4.240 117.000.000 — — 38.000 166.000 3.126.207.000 250.903.000 75.943 287.000 20.000 — — — — — 115.000.000.593.245 2.850 — 2.662.507.850 82.688.747 258.000.687 — — 20.467.052 — — — 5.296.875 — — — — — — — — — — — — — — .539.429 375.915.632 75.000 69.914.155.000.300 19.237 20.625 14.000 — — 28.104.328.750 199.885.148.123 37.575.016 — — — 26.855 2.507.279.484 — — 6.288 — — — — — — 117.352.825.575.752 269.000 64.618.000 1.000.923 2.850 610.032 50.747 6.525.500 31.522 27.000.000 41.155.000.500 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 7.ProJecT CommiTmenTs Fiscal Year 2013 _ 109 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — 4.016 10.000.000.885.500 125.296.747.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 16.131 6.000 250.558 25.000.903.940 — 61.750 105.689.143.328.625 — — — — 83.507 30.500.000 — — — — — — — — — — — — — — — — — — — — — — — — 152.000 — — — — — — — 25.598.592.000.000.850 82.539.662.460 — 4.000 56.500 — 20.583.760 — 128.000 2.155.000.588 19.913 61.128 29.901.210.728 2.895.316.641.423.316.000.039 4.000 115.039.309 — — — — 25.000.098 — — — — — 20.000.728 2.760 50.000 13.652.923 2.060 269.943 287.450 — — 3.425.830.000 — 14.781 25.000 2.001 252.000 29.000 41.032 — — 21.105.102 117.105.005 2.000.000 — — 610.000.903.000 2.747.

Canopus Holding S.A. Banco Supervielle S.000.000 — 45.S.A. Banco Itau Unibanco S. T. LP Modern Karton Sanayii ve Ticaret A.000 25.S.000 6. Plato Meslek Yuksek Okulu TURKIYE SINAI KALKINMA BANKASI.000 30.A.C Ozyegin Universitesi T. Finansbank A.A. Banco de Galicia y Buenos Aires. Sanko Tekstil Isletmeleri Sanayi ve Ticaret A.C.A.000.000 75.000 — Asaka Bank FI-2 FI-2 FI-2 C B B FI B B FI-2 B B B FI-2 B FI B B B B B B B B C FI C C — 75.S.A. A.A.000 42. Turkiye Sise ve Cam Fabrikalari. Super Film Ambalaj Sanayi ve Ticaret A.A.000 — — — — . A.000.000 — — — 50.A.000.A.A. S.000. Banco Ganadero Banco Mercantil S.S. Ukraine Axzon A/S CJSC Myronivsky Hliboproduct FE Integrated Agrosystems LLC Real Estate F.S.A.U.C.800 50.000 30. y F. Banco Sofisa S.I.A.000 40.500 35. Banco Industrial e Comercial S.000 16. Izmir Buyuksehir Belediyesi Izmir Su ve Kanalizasyon Idaresi Genel Mudurlugu Kipas Kagit Sanayi Isletmeleri A. Banco Fibra S.522. Banco Pine S.G.A.000. Banco CMF S.A.000.000. – Brazilian Hospitality Group Banco ABC BRASIL S.000.000 30. Is Finansal Kiralama A. Mediterra Capital Partners I.000 58. San Miguel A.000. S.A.000. Banco Cooperativo Sicredi S/A Banco Daycoval S.A.000.000 10.000 — 8. Belize Atlantic Bank Belize Banco Bisa S. LLC Savservice Center LLC “Firm “Astarta-Kyiv” Limited Liability Company “Okkoskhidinvest” NIBULON AGRICULTURAL LIMITED LIABILITY COMPANY PJSC OTP Bank Raiffeisen Bank Aval The State Export Import Bank of Ukraine Uzbekistan Latin America anD tHe Caribbean Argentina BBVA Frances S.S.C. A. Companhia Brasileira de Securitizacao C C C FI C FI B FI C FI-2 FI C B B FI-2 FI FI-2 FI FI-2 FI FI-2 FI-2 C FI B B C — — — — — — — — — — — — — — — — — — — — — 100. Banco Patagonia S.A.000 — — 50.I.S.S. Centro de Imagem Diagnosticos S.000. Banco Itau Argentina S. Yapi ve Kredi Bankasi.000.000.000. Banco Indusval S.A. Banco Industrial do Brasil S.891.A.A. Banco de Credito Brazil AEGEA Saneamento S/A BHG S.110 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) EUrope anD Central Asia Fibabanka A.S.S.000.500.S.A.A.000 35.000.000 40. Sekerbank T.

506.000 40.620 66.000 — — — — — — — — — — — — — — — — — — — — 10.000 10.000 75.745.588 — — — — — — — — — — — — — — — — — — — — — — 55.620 66.000.369 35.800 50.000.000.500 — — — — — — — — — 21.477 35.527.124 527.000 40.000.976.719.610 5.474.000 1.719.000.226 — 1.500 8.249.000.474.645.000.891.886 3.000.256.400 — — — — — — — — 32.000 — — — — — .940 50.273 53.887.182 — — — — — — 450.496 45.000.368.396.858.726.000 109.972 — — — — — — — 25.825 2.249.000 151.000.851 125.297.000.494 — — 65.592 — — — — — — — — 1.927.494 12.049.000.000.788 — 167.000 — — — — — — — — — — — — — — — — — 12.480.500.999.000 35.000 25.000 14.000.124 527.025 34.341 29.000.391.480.527.368.201 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 10.902 — 10.391.025 34.182 24.406.000.902 65.726.537.884.000 39.000 32.000.341 29.858.747 10.000.400 75.886 3.000 167.286.678.000 144.887.940 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 32.000 16.851 125.297.588 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 32.093 4.000.972 144.496 — — — — — 109.049.086.678.286.645.927.000.781 3.000.182 — — — — — — — — — — — — — — — — — — — — — 300.000 5.000.000 50.000.ProJecT CommiTmenTs Fiscal Year 2013 _ 111 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — — — — — — 19.093 4.681.201 25.000 6.592 21.610 5.000 1.100 25.884.745.976.396.000 42.226 450.182 24.000.747 — 61.000.825 2.000 151.000 5.506.256.369 35.000 19.788 100.000.086.000.100 25.781 3.000 75.522.000 — 39.406.500 35.537.681.999.000 30.000 30.000 58.000 30.477 35.273 53.

032.000 — — 10.A. Indicana Holdings Inc InterEnergy Holdings Unigold Inc. Compartamos.000 — — — 11.000 — 25.000 — 20. S.A. Banco Atlantida S. LP SAFTPAY.795.000.L.000 — — 7.A Banco de Credito e Inversiones Bco Internacional SA Corpbanca Inversiones Magallanes S.L. Banco Improsa S.S PetroNova Inc.A.A.000.A.000 — — — 9.S. Ecuador El Salvador Procesadora Nacional de Alimentos C.000. Latin American & Caribbean Fund.000 3.S Energia Integral Andina S. Grupo Factoring de Occidente S. S.000 50.996. Banco LAFISE Costa Rica.002 5. IFC African.A.500.000 — — . Recaudo Bogota SAS TRIADA S.000. Banco Financiera Centroamericana. (Banco Ficohsa) Banco LAFISE Honduras .000. S.000 — 14.A.A.A Banco Promerica de Costa Rica. Sul America S.A.112 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) Latin America anD tHe Caribbean Equatorial Energia S. S.A.000. Banco Financiera Comercial Hondurena S.000 — 55.Crediservicios S.000 10.000 — — 25. A FI-2 FI-1 FI-1 FI-3 C FI FI-3 FI-1 C FI-2 FI-2 FI-1 FI C C FI-3 B FI-3 B C B C FI-2 FI C FI FI-2 FI-3 C B A B B FI C FI FI C FI-3 FI B B C FI FI-2 FI C B FI-2 C FI C — — — 19. Guyana Haiti Honduras Guyana Goldfields Inc Turgeau Developments S. Jamaica Latin America Region MBJ Airports Limited Amerra Latin America Finance LLC Grupo Santillana de Ediciones.A.A.PRONACA Banco Agricola S. S.A.A.000.000.000. (Guatemala) Banco Internacional S. S. INC. Virgin Mobile Chile SPA Colombia BBVA Colombia S.250.S Costa Rica Banco General (Costa Rica) S. Coopealianza R.000. La Hipotecaria Guatemala Banco GyT Continental S. BANCO DEL PAIS S.A.A.A. Credivalores .A.000. Seguros G&T. S.000 32. . BANCO MULTIPLO Recovery do Brasil Consultoria S.000 — — — 7.212 — — — — — — 75. Caribbean Region Chile Portland Private Equity Banco Bilbao Vizcaya Argentaria (Chile).A.A.000.A. LP Gavea Fundo De Investimento Em Cotas De Fundo De Investimento Em Direitos Creditorios Gávea Crédito Estruturado Fundo De Investimento Em Direitos Creditórios Munich Re Surety Facility NBC BANK BRASIL S.A. S. FIRST Brazil Impact Investing Fund.000 — 10. Banco Industrial S.A.A. Grupo Financiero Coocique R.A.001.000.A.A.S. Virgin Mobile Colombia S.683.L Dominican Republic Banco Multiple Leon.A.000 20.361 — — 13.

945 20.000.250.000.000.000 50.000.000 14.000 — — — — — — — — — — — 13.485 75.000 197.000.000 10.456 23.545.521 7.000.000.077 13.415.250.002.000 — — — — 10.000 11.422.740.000 8.984.000 9.281 11.516.000.000 — — — 22.000.500.001 4.943.000.309 15.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 105.000 69.212 70.981.000.000.000 100.752.190.000.000 9.000 50.539.000.422.000 — — — 10.000 — — — 8.000.767 13.000.000.000 54.000.483.000 8.945 — — — — 9.000.934.000 70.001.887 25.000.000 7.140 — — — 5.882 18.000.000.000 65.000 32.051 20.996 — — 8.000 10.000 197.000 3.000 5.000.539.500.500.000 — — — — — — — — — 50.981.273 62.943.000 — — — — — 7.000 — — — — — — — — — 70.002 5.000 19.415.000 9.239 259.000.882 8.309 15.000 7.830.207.250.239 259.683.000.001 4.934.361 5.984.545.000 10.984.485 — 6.996 9.051 20.752.483.000 — 65.000.931 10.000.000 22.516.000 15.767 — — — — — — — — — 54.000 19.000.604.140 71.000.000.000 — — — — — — — — — — — — — — — — — — — — 7.806 25.000 6.032.000.795.521 7.207.106 19.000 10.000.250.000.000.000 10.ProJecT CommiTmenTs Fiscal Year 2013 _ 113 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) 105.002.456 23.000.996.984.000.000 14.281 — — — — — 14.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 11.106 — — — 100.077 13.604.000 5.000.000 69.740.190.887 — — — 830.273 — 10.000.000.931 10.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 10.000 20.000.000 71.500.000.000 — — — — .806 — — — — — — — — 15.000 70.

BBVA Banco Continental Banco Interamericano de Finanzas S. S.A.P.000.000. Credit Suisse Mexico Opportunities Trust Desarrolladora Homex S.A.R.952 50. Arab Republic of Nile Kordsa Company for Industrial Fabrics SAE Ahli United Bank (Egypt) S. S.316.A. Cooperativa Nacional de Productores de Leche Girocantex S.114 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) Latin America anD tHe Caribbean Yellowpepper Holding Corp Mexico Agrofinanzas S.563.562.000.000.I de C.A. nnope Urbi. Panama BBVA Panama S. Banco Continental S.V. de C.A.V.A.747 — 496. Edilar. de R. de C.P. Servicios Comerciales de Energia.V.770 — — 285. S.000.A.000 C FI FI C FI A FI FI-1 B B FI C B B B B B B B B B C FI C A C FI C B C FI FI-3 FI FI FI B FI-1 FI-2 C B B FI B — — 44. Nuevo Banco Comercial S. SOFOM ENR Proyectos Adamantine S.000 75. de C.711.000.062.V. Suriname Uruguay De Surinaamsche Bank N.295 50.055. Institucion de Banca Multiple Banco Monex.A.333.000.B de C.000 . Banco LAFISE Panamá. Nicaragua Banco de America Central. MiDDle East anD NortH Africa Afghanistan Afghanistan International Bank CJSC Telecom Development Company Afghanistan Limited Egypt. de C.A.000.000 10. de C.882.A.V.000. Tiendas Comercial Mexicana S.A.000.000 25.A.000. Surinor S. de C. Proteak Uno S.N. Consorcio Naviero Nicaraguense S.000 — 46.112 47. de C.A. S. Financiamiento Progresemos.180 — 141.271 40.412.000 — — — 25.A.A.A.B de C.000 10. Fawry for Banking and Payment Technology Services SAE Petroceltic International PLC Transglobe Energy Corporation Iraq Commercial Bank of Iraq Gulftainer Company Karbala Cement Manufacturing Limited C B B FI C B B FI B B — 65.A. Sociedad Financiera de Objeto Multiple E.A.000.000 11. Tenedora Nemak. de C.000.000 74.000 — — — 15. de C. S.000 — — 15.V.673 14.A.000 — 9. Grupo Calidra. S. LAFISE Bancentro. S.C.A. S. S.P. Sudameris Bank Peru APM Terminals Callao S.V.B. Desarrollos Urbanos Educativos S.A.A.I.P.A. Norson Holding.000.000 18.A. S. Institucion de Banca Multiple Banco Mercantil del Norte. A. Multibank Paraguay BANCO ITAU PARAGUAY S. S.323. S.I. S.A.000 — — 30.I.L. S.V.A.000 — 15. CHG Meridian Mexico.045 101.000. Institucion de Banca Multiple Banco del Bajio.333 — 30.V.000.A.000. SA de CV.V.E. Banco de Finanzas Banco de la Produccion S.A.A. S.A.000.A.000 70.E. Banco Bilbao Vizcaya Argentaria Paraguay S. Hospitaria Tenedora.750. Banco Regional S.000 33.V. Braskem Idesa. Desarrollos Urbanos.A.000 — — 100.V.629 423.A.V.

170.615 285.000 41.789.711.936.330.128.000 — 8.400.194.000 18.540.253 25.194.394.170.333.778 106.000.600.447.000.000.000.000 82.000.000 25.062.000.000.000.271 40.000 12.897 500.000.000 6.000.000 10.253 — 82.074 15.562.000 36.000.000 13.000 56.000 — — — — — 350.000.316.789.778 106.490 — — 56.000.112 47.563.000 1.453.011 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 113.150.483 44.000 — 19.394.689 547.000.000 39.000 — — — — — — — — — — — — — — — — 1.000 — — — — — — — — — — — — — — — — — — — — — — 170.000.074 15.323.000.607 496.000.000 141.000 1.000.000.250.000 46.490 65.615 — — — — — — — — — — — — — — — — 20.310 — — 38.000.295 50.441 1.011 9.600.550 31.453.055.000 13.000 — — — — — — 40.785 10.150.840.000.689 547.882.447.747 1.000.330.897 500.180 50.000 82.952 50.000.629 423.540.500 14.770 12.000 74.000 19.000 11.000 15.000 10.000 — — 1.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 12.000.045 101.000 — 7.000.000 38.000 — — — — — — — — — — .673 14.000.785 60.400.000.000 20.923 — — — — — — — — — — — — 1.ProJecT CommiTmenTs Fiscal Year 2013 _ 115 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) 113.000 100.000 — — — — — — 6.333 12.000.000 — — — — 30.330.128.923 30.550 31.500 29.936.000.330.310 30.000 15.483 — — — — — 50.840.000 36.000.750.607 — — — — — — — — — — — — — — — — — — — — — — — — — — 50.000 15.441 1.000 70.000 24.412.

L. BANKMUSCAT SAOG Pakistan Allied Bank Limited Bank Al Habib Limited Bank Alfalah Limited BankIslami Pakistan Limited Habib Bank Limited (HBL) Habib Metropolitan Bank Ltd.000 12.O.L.000 — — — — — — — — — — — 11.C.A.000 — — 2.C.000 — — — 150. Southeast Bank Limited The City Bank Limited bKash Limited FI-3 B FI-2 B C B FI FI-2 FI FI-2 FI-3 35.250.000 2.A.292.A. (Holding) Credit Libanais SAL Fransabank SAL (Fransabank) Vitas SAL MENA Region FIMBank P. Institut des Hautes Etudes de Management Oman Ahli Bank S.000.000 30.000.000 — — 2.000.A.000 — 50.A. Capital North Africa Venture Fund II SICAV-SIF S.000 — — — — — C C B C FI FI-3 FI-3 C FI C C B FI FI FI FI-3 FI-2 B B B FI FI B FI FI-1 FI C C C FI C B C C U C FI C C FI-2 FI FI U — — 2.000.000 2.500. GC Credit Opportunities GP Limited Metito Holdings Limited Renaissance Services SAOG Sakr Energy Solutions FZCO Morocco Banque Centrale Populaire S.000.000.000.000 — — 8.000.000 30.116 _ IFC Financials anD ProJecTs 2013 IFC Region Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) MiDDle East anD NortH Africa Jordan AL ETIHAD Bank of Jordan LTD CTI Group Inc.000 — — — — — — — 6. Cairo Amman Bank Capital Bank of Jordan Middle East Microcredit Company (non-profit) LLC Tamweelcom Lebanon BLC bank S.870 — — .P. ENDA Inter-Arabe West Bank and Gaza Bank of Palestine National Bank SoUtH Asia Bangladesh AB Bank Limited Ananta Apparels Limited BRAC Bank Butterfly Marketing Limited Eastern Bank Limited GrameenPhone Limited Green Delta Insurance Company Ltd.L. Leopard Bangladesh Fund L.000. Bank of Beirut Bank of Beirut and the Arab Countries S.000.000 — 10. IMPERIAL DEVELOPERS & BUILDERS (PRIVATE) LIMITED Karachi Organic Energy (Private) Limited MCB Bank Limited Meezan Bank Limited NIB Bank Limited SilkBank Limited Soneri Bank Limited United Bank Limited Tunisia Amen Bank S. Banque Libano-Francaise Butec Group S.000.A.L.G.000.000.000 6.A.

877.672 — — 9.617.000.263 33.750 10.848 15.612 — 123.429.000 142.672 123.946 2.702.036.680 2.207.282 — — — 38.053.044.585.711 15.857 — — — — — — — — — — — — — — 4.796.076.680.250.354 300.500 7.429.965.292.662 38.420 8.073 — 6.752 114.598.585.601 36.500 — — — — — — — — — 3.210 6.022 12.750 — — — — — — — — — — — — 37.000.263 33.351.000 — — 10.218.138.000 — — — — — — — — — — — 2.207.000 38.000 — — — — — 40.602 70.946 2.984 62.890 — — 14.500.042.661.237 16.668.410.000 82.524.000.053.420 — 83.564.396 25.000 599.680.154 30.790 5.890 4.000.179 — — 6.400.000.495.351.154 — 5.138.960.076.662 38.316.790 5.473 125.344.000 6.000.960.210 — 142.354 300.000.172 13.984 62.000.759 67.179.550.000 50.000 17.605 2.572 11.796.848 15.340.000 6.661.430 7.550.759 67.980 82.000.702.282 150.495.857 3.473 125.500 20.237 16.000 2.605 — 52.073 115.000 9.344.212 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4.598.000 83.000 — — — — — .965.294.497.980 82.664 15.617.430 7.711 15.172 13.497.042.000.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 6.000.000.014.000.990.340.870 14.000.680 — 6.316.903.044.572 — — 56.294.500 7.000.400.877.599.036.601 36.309 — — — — — — — 20.410.564.179.612 6.903.524.ProJecT CommiTmenTs Fiscal Year 2013 _ 117 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — — — — — — — — 105.000 6.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 4.212 6.990.330.396 25.752 114.668.014.664 15.000 6.000.602 70.330.218.000 56.000 2.179 2.000.022 12.309 6.

SEI Solar Power Pvt. Ltd Snowman Logistics Limited Suryoday Microfinance Private Limited The Ratnakar Bank Limited Utkarsh Micro Finance Private Limited Value and Budget Housing Corporation Private Limited YES BANK LTD Nepal Bank of Kathmandu Limited Buddha Air Private Limited Butwal Power Company (BPC) Himalayan Bank Limited Laxmi Bank Limited Nepal Industrial and Commercial Bank Ltd.000 74.000.000 8. Ecolibrium Energy Private Limited Fortis Healthcare Limited Green Infra Solar Farms Limited Green Infra Solar Projects Limited Gujarat Pipavav Port Limited Hikal Limited IFMR Rural Channels and Services Private Limited Inabensa Bharat Private Limited India 2020 Fund II Limited Inox Renewables (Jaisalmer) Limited JMT Auto Limited Jain Irrigation Systems Ltd Kaizen Private Equity Kotak Mahindra Bank Limited LNJ Power Ventures Limited Meghmani Finechem Limited NSL Renewable Power Pvt Ltd NSL Wind Power Company (Satara) Pvt Limited National Collateral Management Services Limited OCL India Limited PTC INDIA FINANCIAL SERVICES LIMITED Power Grid Corporation of India Limited Ramkrishna Forgings Limited Religare Enterprises Limited Rhodia Inc.000.768.866 — — — 70.118 _ IFC Financials anD ProJecTs 2013 IFC Region SoUtH Asia Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) Bhutan Bank of Bhutan Bhutan National Bank Limited C FI-1 B FI FI-3 B C A FI C FI-3 C B B B B B FI-3 B FI-2 B B B FI FI B B A B B A FI-2 A B FI-2 B B B FI-3 FI-2 FI-3 B FI FI B B C C C C C FI-1 FI-1 FI-2 — — — — — 1.000 — 55.000 14.129 85.353.000.000 India ATC Tires Private Limited Aavishkaar Goodwell India Microfinance Development Company II Avanse Financial Services Pvt.194 — — — — — — 6.000.000 9.198 — 40.693 12.000.000.763.994.865 2.000 — 50.000 2.000 30.000.103. Ltd Azure Power India Private Limited Azure Sun Energy Private Limited Bhilwara Energy Limited CapAleph Indian Millennium Fund DQ Entertainment Plc Dewan Housing Finance Corporation Ltd.291.000 — 14.000.900.134 2.107.000.727 — 5.000 — — — — — — — 24. Nepal Investment Bank Ltd Southern Asia Region Sri Lanka Earthport PLC Cargills Agriculture and Commercial Bank Limited Commercial Bank of Ceylon National Development Bank PLC .000.000.939.000 — — 7.000 8.500.000 100.936 2.531.371 60.421.000.000.000 50.000.000 18.

236 1.000.266 3.510 3.000 2.866 1.820 75.584 774.932.240.000.029.000.340 — — 3.979 — 1.291.000.000.510 3.061.000 — — 1.000 70.000 — — — — — — — — — 120.000.887.029.225.098.000.000 100.340 5.200.500.156 — — 1.712 — — — — — — — — — — — — — — — — — — — — — — 36.000 4.000 — — — — 7.000 — — — — — — — — — — — — — — — 92.033 47.198 3.240.000 30.000 36.000 2.964 22.098.500.000 — 750.677 10.000 25.639.371 60.639.000 2.103.000 45.714 24.900.000 4.939.693 12.000 3.000.462.947 13.353.200.971.000 1.895.257.ProJecT CommiTmenTs Fiscal Year 2013 _ 119 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — 28.156 6.584 774.947 — — — — — — — — 10.000.000.000 750.000.000 — — — — — — — — — — — — — — — — — — — — — .008 7.914 2.526 — 25.526 14.876.000.000.462.225.000.000 59.663 10.000 40.000.033 47.375 10.000 8.000.000.266 3.680 874.971.000 — — 9.000.253 15.000.876.000.107 6.000 100.000 18.000 18.081.423.000.000.975 29.714 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 163.943.236 473.336 11.200.000.783.768.107 6.273 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 163.273 7.000 1.763.427.107.865 2.000 7.000.000.008 — — — — — — — — — — — — — — — — — 13.068.000.500.061.531.000 1.000 9.887.943.081.200.427.871 — — — 2.000 8.727 1.820 5.000 — — — 4.194 2.000 50.975 490.257.964 22.680 874.000 — — — — — — 65.000 85.783.134 2.336 11.253 15.677 — — 7.000.068.000 3.

Republic of Côte d’Ivoire Credit du Congo Azito Energie.000 7.A.000.000 — — — — — — — — — — — 33.A.000. S.A. ETC Group Flexenclosure AB (publ) IHS Holding Limited IHS Nigeria Plc Root Capital.000. Softlogic Holdings PLC Uni Walkers (Private) Limited Union Bank of Colombo PLC SUb-SaHaran Africa Africa Region Actis Africa Real Estate Fund 2 LP African Development Partners II LP Afrimax Limited BNP Paribas (Suisse) SA & BNP Paribas Business Partners International (Proprietary) Limited DiViNetworks Ltd. Democratic Republic of Ecobank Centrafrique S. Satya Capital Africa Fund II L. Inc.000.000. Ecobank Benin Botswana Burkina Faso Tsodilo Resource Limited Coris Bank International S. Ecobank-Burkina Gryphon Minerals Burundi Cameroon Interbank Burundi S.000 — B FI-2 B FI-2 FI C B C B B FI-2 FI-2 C C C B C C B FI FI FI-2 FI FI FI FI-3 FI-2 C B B C B B C A C FI FI-2 FI FI C C C A B FI-2 C FI C — — — 250.000 4. Nations Trust Bank LTD.000 — — 125.000.000. Advans Banque Congo FINCA DRC S.000 5.000 — — — — — — — — — — — — — 2.000 80.120 _ IFC Financials anD ProJecTs 2013 IFC Region SoUtH Asia Country Name Company Name Environment & Social Category Code IFC Loan & Quasi-Loan Commitments ($) National Development Bank Plc.A.000.L Diamond Bank Benin S. Societe Commerciale de Banque Cameroun Central African Republic Chad Congo. The Ghana Africa Railways Limited Ecobank Gambia Limited Advans Ghana Savings and Loans Company Limited Bank of Africa Ghana Limited EB-ACCION Savings and Loans Company Limited Ecobank Ghana Limited Fidelity Bank Limited Guaranty Trust Bank (Ghana) Limited HFC Bank Ghana Limited Kosmos Energy Finance International Takoradi International Company (TICO) UT Bank Ltd Guinea Kenya Ecobank Guinea Bank of Africa Kenya Ltd Chase Bank (Kenya) Ltd FI C B B C — — 10.L Rawbank Commercial Banking Congo.A.000 15.000 — — 25.000.800 — 7.A. S.A. Sama Resources Inc Societe Ivoirienne de Banque Eastern Africa Region Gambia.A. IAS International Aircraft Services Ltd.000 — — — — .000 — — 70. Ecobank Tchad S.000.000. Ecobank — Côte d’Ivoire S. Ecobank Cameroun S.870.000.P.R. A.A. Compagnie Hoteliere de la Lagune S. Angola Benin Banco de Fomento.R.A.

265.000.000 70.997.992.000.822 387.741 — — 253.561.000 6.079.000 497.000.000.000.000.416.262.948.096 — — — — — — — — — — — — — 1.834.000 40.529 — 2.814 68.000 250.177 5.204.000.000 60.000.865.800 55.332.834.000 253.000 85.382 202.386.967 7.836 — — — — — — — — — 60.749.000 12.774.323 105.429 15.769.429 15.919 — 252.876 349.992.332.357.550 — — 76.356 9.000 6.275 — 497.888 — 68.000.000 — 10 5.619 10.000.079.747 24.000 — 387.550 33.000 — — — — — — — — — — — — — — — — 74.532.000.000.000.000 — — — — — — — — — — — — — — — 5.865.000.870 13.192 — — — — — 10.192 — — — — — 165.000.ProJecT CommiTmenTs Fiscal Year 2013 _ 121 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — — — — — — — — — — 165.997.000 — — — 1.503 142.356 9.561.000.000 1.532.000 7.741 10.000.000 76.747 24.977.806 5.836 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 10.800 2.000 74.251.919 1.015 1.404 — 142.000 — 40.458 18.079.977.926 38.251.416.000 35.151 130.800 55.529 2.000.000 4.634.881 — — 2.000.000.503 — — 1.749.000 — 12.000 10.404 1.926 38.000.000 15.888 141.000.386.774.265.619 10.015 1.000.761 6.458 18.000 10.000.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — .000 40.000 40.000.096 252.769.634.033 9.806 5.870.000 10 5.258.870 13.033 9.204.876 349.357.881 2.761 — 2.948.323 105.814 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 5.258.967 — — 6.079.822 — 141.000.000.177 5.000 5.275 2.000.000 2.382 202.000.000.151 — — 2.262.

122 _

IFC Financials anD ProJecTs 2013

IFC Region

Country Name

Company Name

Environment & Social Category Code

IFC Loan & Quasi-Loan Commitments ($)

SUb-SaHaran Africa Cooperative Bank of Kenya Limited DTBK RSF Diamond Trust of Kenya Limited Ecobank Kenya Limited Electrawinds SE Fina Bank Kenya Limited Gulf African Bank Limited Gulf Power Limited Housing Finance Company of Kenya Limited I and M Bank Ltd. Kenya Commercial Bank Kenya Power and Lighting Company Limited Kenya Tea Development Agency Holdings Limited Kipeto Energy Limited Prime Bank Limited Liberia AccessBank Liberia Ecobank Liberia Guaranty Trust Bank (Liberia) Ltd Hummingbird Resources Plc Madagascar Malawi Bank of Africa Madagascar First Merchant Bank Ltd., Malawi NBS Bank Limited Mali Mauritania Ecobank Mali Attijariwafa Bank Mauritanie S.A BB ENERGY (GULF) DMCC Generale de Banque de Mauritanie pour l’Investissement et le Commerce Mozambique Niger Nigeria AFRICAN BANKING CORPORATION MOZAMBIQUE Ecobank Niger AB Nigeria Microfinance Bank Access Bank Plc Access Bank Plc. Diamond Bank Plc Ecobank Nigeria Plc Fidelity Bank First City Monument Bank Guaranty Trust Bank Plc. Indorama Eleme Fertilizer & Chemicals Limited Kaizen Partners Limited LAPO Microfinance Bank Natural Prime Resources Nigeria Limited RSF Access Bank Zenith Bank Plc Rwanda Banque Commerciale du Rwanda (BCR) Ecobank Rwanda Limited São Tomé and Príncipe Senegal Banco Internacional de São Tomé e Príncipe CBAO Groupe Attijariwafa Ecobank Senegal Matelec S.A.L. MicroCred Senegal Sierra Leone Ecobank Sierra Leone Limited Guranty Trust Bank Sierra Leone Sierra Leone Commercial Bank South Africa Amakhala Emoyeni RE Project 1 (RF) Proprietary Ltd Country Bird Holdings Limited FI-2 FI-2 FI-2 FI C C FI A FI-1 FI-2 FI-2 B B C C FI FI C B FI C FI FI C B FI C C FI-3 FI-2 FI-2 FI FI C FI FI B FI FI-3 B FI-2 C C C C C C A FI C C C B B 60,000,000 — 20,000,000 — 3,000,000 — — 26,922,420 16,000,000 — 40,000,000 50,000,000 12,000,000 2,000,000 — — — — — — — — — — 127,500,000 — — — — — 50,000,000 47,200,000 — — — — 150,000,000 — 5,087,440 19,800,000 — — — — — — — 1,000,000 — — — — 70,703,691 25,000,000

ProJecT CommiTmenTs Fiscal Year 2013

_ 123

IFC Equity & Quasi-Equity Commitments ($)

Risk Management Commitments ($)

Trade Finance Guarantee Commitments ($)

Non-Trade Finance Guarantee Commitments ($)

Total Commitments for IFC’s Own Account ($)

Syndications Commitments [B-loans only] ($)

— — — — — — 4,982,497 — — — — — — — — 231,000 — — 4,751,100 — — — — — — — — — 572,337 — — — — — — — — 20,250,000 — — — — — — — — — — 424,934 — — — — —

— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 2,800,000 —

— — 6,774,372 4,413,002 — 21,463 — — — 13,118,498 107,994,261 — — — 8,422,320 — 12,000,000 8,904,832 — 40,432,374 7,869,669 1,470,576 18,264,438 8,571,734 — 11,817,545 19,647,879 4,000,000 — 66,388,917 — 295,073,539 38,511,386 3,784,041 140,749,282 282,000 — — — — — 124,607,617 5,672,158 11,415,589 201,590 7,005,774 12,231,221 — — 2,000,000 44,400 112,495 — —

— 10,155,317 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 11,203,588 — — — — — — — — — — — — —

60,000,000 10,155,317 26,774,372 4,413,002 3,000,000 21,463 4,982,497 26,922,420 16,000,000 13,118,498 147,994,261 50,000,000 12,000,000 2,000,000 8,422,320 231,000 12,000,000 8,904,832 4,751,100 40,432,374 7,869,669 1,470,576 18,264,438 8,571,734 127,500,000 11,817,545 19,647,879 4,000,000 572,337 66,388,917 50,000,000 342,273,539 38,511,386 3,784,041 140,749,282 282,000 150,000,000 20,250,000 5,087,440 19,800,000 11,203,588 124,607,617 5,672,158 11,415,589 201,590 7,005,774 12,231,221 1,000,000 424,934 2,000,000 44,400 112,495 73,503,691 25,000,000

— — — — — — — 26,922,420 — — — — — — — — — — — — — — — — — — — — — — — — — — — — 75,000,000 — — — — — — — — — — — — — — — — —

124 _

IFC Financials anD ProJecTs 2013

IFC Region

Country Name

Company Name

Environment & Social Category Code

IFC Loan & Quasi-Loan Commitments ($)

SUb-SaHaran Africa CustomCapitalSPV Hans Merensky Holdings (Proprietary) Limited International Housing Solutions, S.à r.l. Kaxu Solar One (RF) Proprietary Limited Khi Solar One (RF) Proprietary Limited Petra Diamonds Limited SRF Flexipak (South Africa) (Pty) Ltd. Sasfin Bank Limited Western Platinum LTD Southern Africa Region Tanzania Business Partners International Southern Africa SME Fund AFRICAN BANKING CORPORATION TANZANIA AccessBank Tanzania Limited Aldwych International Limited Diamond Trust Bank Tanzania Ltd Exim Bank of Tanzania FINCA Tanzania Limited National Bank of Commerce (NBC) Togo Uganda Ecobank Togo Diamond Trust Bank Uganda Ltd Eaton Towers Uganda Limited Orient Bank Limited Umeme Ltd. Zambia WORLD World Region APRM-Société Général AllianceBernstein Next 50 Emerging Markets LLC Altobridge Limited Citibank, N.A. Columbia Sportswear Company Delta Partners Emerging Markets TMT Growth Fund II, L.P. Global Climate Partnership Fund SA Global Health Investment Fund Goodyear Tire & Rubber Company IFC Capitalization (Equity) Fund, L.P. IFC Capitalization (Subordinated Debt) Fund, L.P. IFC Catalyst Fund, LP IFC Global Infrastructure Fund L.P. Laureate Education Inc. Levi Strauss & Co. MICROENSURE HOLDING LIMITED Perry Ellis International, Inc. Société Générale S.A. Sunpreme Co. Ltd The Bank of Tokyo-Mitsubishi UFJ, Ltd. Eleni LLC FI FI-3 C FI B FI-2 FI FI-2 B FI FI FI FI B B FI-3 B FI-2 B FI-2 FI-3 — — — 270,000,000 3,956,744 — 30,000,000 — 50,513,831 — 33,105,829 — — — 65,664 862,500 10,040,989 100,000,000 3,000,000 — — AFRICAN BANKING CORPORATION ZAMBIA FI-2 B FI-2 B B B B FI A FI C FI-3 C FI-2 FI FI-3 FI C FI-2 B C B C 26,764,804 — — 75,514,769 69,450,224 25,000,000 40,000,000 — — — — — 4,000,000 — — 3,000,000 — — — 30,000,000 — — —

488 8.598.000 — — — — 1.273 40.956.000.000 76.852 270.325.744 20.000 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 100.000 — — 3.857 3.000 — 485.875 — 1.000.665.000.644 2.000.995.995.000.875 30.346 — — 2.898.000.277.840 10.404 — — 332.000 1.989 100.773 100.841 33.125.000.360.273 — — 5.898.000.000.000 — 1.689.000 1.000 1.000 332.000.000 3.000 3.618.000 30.312.000 2.644 2.000.000 10.000.000 2.857 — — 8.070 876.839.241 876.195 — — — — — — — — — — — — — — — — — — — — — — — 26.277.690 1.917 25.215.955 — — — — 10.690 1.224 28.753.586.764.773 100.030.000.689.000 6.000 100.930.586.404 485.955 8.500 — — — — 1.195 — — — — — — — — — — — — — — — — — — — — — — — — 100.664 2.346 5.000.000.000.040.000.831 336.000 — 10.175.000.841 512.814 38.852 — — 20.000.753.000 3.258 — — — — 6.000 — — — — — — — — — — — — — — — — — — — — — — — — — 2.360.000.258 4.930.000 10.917 25.011.769 70.030.814 38.000 — 336.011.598.000.000 100.000 1.840 — 1.000.513.000 50.125.000.007.000 3.000 100.000.000.000 — — — — — — — — — — — — — — — — — — — — — .488 8.ProJecT CommiTmenTs Fiscal Year 2013 _ 125 IFC Equity & Quasi-Equity Commitments ($) Risk Management Commitments ($) Trade Finance Guarantee Commitments ($) Non-Trade Finance Guarantee Commitments ($) Total Commitments for IFC’s Own Account ($) Syndications Commitments [B-loans only] ($) — 34.000 65.000.007.000.804 34.000.000 — 100.

5 597.353.0 — 6.018.2 94.819.0 — 15.007.0 1.0 33.9 5.000.398.969.700.4 20.655.645.2 98.8 2.609.906.155.1 6.9 974.261.000.000.4 130.7 279.570.451.7 269.798.071.551.957.3 190.974.327.660.727.2 501.756.6 4. Republic of Côte d’Ivoire Djibouti Eritrea Ethiopia Gabon Gambia.8 47.233.500.4 — 195.646.4 48.7 44.0 22.8 235.5 543.285.568.0 — 432.871.308.8 1.9 974.000.0 1.0 35.2 4.327.0 9.1 245.1 280.0 157.900.9 2.512.269. Republic of Statement of Cumulative Gross Commitments1 (at June 30.226.730.5 5.8 235.374.464.719.0 61.000.4 385.750.244.901.449.0 9.192.442.000.768.2 3.675.664.0 25.282.982.4 371.957.0 949.6 46.482.660.0 22.779.064.8 337.500.341.5 41.0 94.488.588.779.000.1 138.890.730.2 — — — — — 471.0 1.911.6 47.088.007.0 110.973.131.6 2.6 86.8 219.5 158.0 — — — 312.0 — — 12.0 25.1 339.2 100.0 35.000.6 2.500.4 245.705.8 99.969.5 322.246.7 454.2 .0 40.0 949.103.8 337.000.750.192.6 86.901.9 5.000. The Ghana Guinea Guinea-Bissau Kenya Lesotho Liberia Madagascar Malawi Mali Mauritania Mauritius Mozambique Namibia Niger Nigeria Rwanda São Tomé and Príncipe Senegal Seychelles Sierra Leone Somalia South Africa South Sudan Sudan Swaziland Tanzania Togo Uganda Zambia Zimbabwe Regional Investments: Sub-Saharan Africa East Asia anD tHe Pacific Cambodia China Fiji Indonesia Kiribati Korea.126 _ IFC Financials anD ProJecTs 2013 Investment Portfolio Region Country SUb-SaHaran Africa Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Central African Republic Chad Congo.8 — 13.353.768.728.410.727.0 1.103.9 5.785.5 473.233.521.0 — — 86.261.5 383.5 1.0 1.071.943.1 264.6 46.982.275.5 335.973.0 326.4 50.7 44.244.5 167.5 15.459.750.8 243.664.6 96.1 1. Democratic Republic of Congo.000.149.8 179.510.588.8 454.0 211.5 255.109.5 — 13.500.0 868.619.8 — — 1.502.963.2 69.4 62.8 7.993.1 47.2 60.040.660.142.4 224.927.1 267.1 5.252.000.475.8 7.3 22.458.0 70.1 — — 21.493.5 5.0 70.0 27.267.9 7.645. 2013) (US$ Thousands) Number of Enterprises IFC Loan & Guarantee Participations Total 7 10 6 15 9 37 6 1 7 21 7 49 1 1 8 5 10 72 11 4 97 2 8 21 20 23 14 17 27 6 3 95 15 1 31 7 9 2 83 1 6 9 57 11 51 37 51 85 326.374.451.910.5 39.246.3 22.167.3 2.8 190.455.211.0 70.068.109.000.8 4.0 130.2 10 233 8 118 1 51 151.512.808.775.808.794.2 501.217.0 — — 13.5 15.1 163.7 284.0 157.9 96.5 145.341.9 2.443.798.442.9 96.8 1.0 2.222.

096.000.5 2.129.096.487.661.9 11.5 43.179.396.9 106.572.0 508.893.0 6.3 — 47.829.855.5 115.3 9.6 546.0 172.0 11.2 115.1 646.966.2 221.916.0 3.7 — 3.309.545.604.0 70.442.InvesTmenT porTfolio Statement of Cumulative Gross Commitments1 (at June 30.3 271.0 804.880.962.462.786.8 35.000.951.8 160.000.0 700.9 9.0 — 49.6 183.745.9 11.022.700.443.0 452.570.3 607.806.003.157.322.700.4 102.759.6 546.5 76.0 323.8 176.419.000.615.874.309.121.8 3.826.4 20.904.5 333.000.787.535.0 16.087.9 86.966.2 278.389.951.8 154.474.330.3 271.647.0 135.7 — — 35.5 344.157.9 596.096.141.8 149.334.0 323.382.017.4 1.450.7 33.0 45.814.888.8 2.865.4 102.0 3.2 1.748.577.8 731.9 86.7 241. Former Yugoslav Republic of Moldova Montenegro Poland Romania Russian Federation Serbia Slovak Republic Slovenia Tajikistan Turkey Ukraine Uzbekistan Regional Investments: Europe and Central Asia 19 13 26 17 30 25 19 18 11 21 34 33 3 15 7 11 15 18 6 44 41 191 38 7 12 17 170 49 17 56 442.350.974.985.6 1.000.0 .2 420.2 80.8 35.245.648.0 92.9 93.930.4 — 1.6 221.041.885.8 533.0 1.681.8 10.894.2 233.900.3 8.048.754.0 208.250.000.0 — 197.543.0 20.0 2.543.445.187.639.0 437.6 — — — 1.455.1 500.694.372.631.3 115.9 573.2 76.805.163.9 137.5 2.8 95.189.937.1 657.500.9 857.000.500.3 674.0 2.273.543.1 43.0 11 12 16 1 10 101 7 1 1 84 1 1 3 50 39 49.754.511.879.6 1.116.637.320.543.7 288.286.4 304.320.0 168.637.8 282.540.245.135.5 2.637.3 36 3 365 7 18 39 9 1. 2013) (US$ Thousands) _ 127 Region Country Number of Enterprises IFC Loan & Guarantee Participations Total East Asia anD tHe Pacific Lao People’s Democratic Republic Malaysia Mongolia Myanmar Papua New Guinea Philippines Samoa Singapore Solomon Islands Thailand Timor-Leste Tonga Vanuatu Vietnam Regional Investments: East Asia and the Pacific SoUtH Asia Bangladesh Bhutan India Maldives Nepal Sri Lanka Regional Investments: South Asia EUrope anD Central Asia Albania Armenia Azerbaijan Belarus Bosnia and Herzegovina Bulgaria Croatia Czech Republic Estonia Georgia Hungary Kazakhstan Kosovo Kyrgyz Republic Latvia Lithuania Macedonia.894.0 6.8 245.0 1.316.445.3 2.904.975.0 — 5.3 455.381.438.000.2 553.0 232.543.685.348.757.461.0 6.749.0 12.139.0 — 115.322.604.3 — — — 253.6 — 1.8 104.557.888.5 304.0 — 10.763.396.814.2 438.587.257.141.0 36.6 2.607.8 478.0 10.175.0 9.158.511.0 200.409.0 207.787.2 686.158.981.8 1.668.143.692.224.840.868.1 — — — 695.6 2.646.4 1.750.0 25.8 8.7 197.0 33.5 500.428.419.0 3.0 23.595.2 420.944.630.570.0 16.448.

9 1.372.8 319.625.294.9 402.0 2.0 24.163.000.0 8.849.7 460.731.000.000.160.664.370.6 153.0 620.6 453.000.9 31.906.065.7 457.866.436.8 259.540.274.000.6 700.0 607.0 1.834.791.0 262.0 966.0 220.0 1.400.133.6 897.421.421.440.596.3 261.2 1 191 6 4 29 244 56 117 30 1 36 23 18 2 26 7 11 20 22 191 21 27 15 72 3 1 15 18 39 71 30.641.250.0 635.631.000.6 1.663.127.430.846.820.4 452.1 — — 417.853.587.7 601.1 8.931.0 24.1 57.9 — 789.7 3.5 12.000.942.367.1 39.978.7 1.013.004.021.395.168.384.9 593.3 8.000.853.025.4 350.5 50. Lucia Suriname Trinidad and Tobago Uruguay Venezuela.0 3.0 6.6 463.037. Islamic Republic of Iraq Jordan Lebanon Morocco Oman Pakistan Saudi Arabia Syrian Arab Republic Tunisia United Arab Emirates Yemen.0 71.000.003.625.4 — 3.383.3 216.4 .013.286.0 4.731.428.181.937.279.607.5 1.0 206.0 387.2 216.627.7 63.604.000.1 113.853.199.556.850.251.914.5 339.5 828.481.8 359.104.300.554.240.5 2.587.4 4.0 721.9 45.0 1.509.0 230.9 11.894.8 — 241. Arab Republic of Iran.0 119.653.596.114.0 923.100.474.8 — 56.6 875.2 — 5.9 3.568.839.9 358.465.871.015.417.0 — 11.1 8.0 1.014.853.286. Republic of Regional Investments: Middle East and North Africa 8 14 1 90 11 7 45 35 41 7 127 8 4 29 2 14 39 220.495.9 31.8 1.108.7 45.0 128.0 380.0 10.372.601.417.0 30.0 120.5 2.4 261.7 30.0 99.394.653.0 703.8 253.4 5.685.376.227.1 8.978.557.000.0 731.5 2.000.6 1.897.6 458.274.5 952.914.686.0 124.6 6.5 1.244.109.646.641.2 426.961.9 3.095.806.000.2 — — 235.000.7 337.237.0 128.342.5 2.2 1.901.5 855.9 376.0 1.654.181.129.644.0 94.0 140.560.542.188.295.0 515.1 3.970.0 1.606.595.707.176.3 372.9 18.883.025.229.258.489.325.484.9 30.065.0 348.500.821.0 877.128 _ IFC Financials anD ProJecTs 2013 Region Country Number of Enterprises IFC Loan & Guarantee Participations Total Latin America anD tHe Caribbean Antigua and Barbuda Argentina Barbados Belize Bolivia Brazil Chile Colombia Costa Rica Dominica Dominican Republic Ecuador El Salvador Grenada Guatemala Guyana Haiti Honduras Jamaica Mexico Nicaragua Panama Paraguay Peru St.797.3 2. Republica Bolivariana de Regional Investments: Latin America and the Caribbean MiDDle East anD NortH Africa Afghanistan Algeria Bahrain Egypt.000.500.0 — 210.1 28.8 194.7 562.0 39.708.8 2.592.370.516.871.3 2.0 — 25.663.5 700.670.114.

5 1.425.0 183.260 975.000.853. 2. .6 65.0 960.712. Of this amount.4m for participant’s account) represents investments made at a time when the authorities on Taiwan represented China in the International Finance Corporation.000. China.685.5 6.0 1.3 144. and Hong Kong SAR.131.727.8 million ($8.0 51.400.6 10.359.5 40.0 62.811.1 19.3 1. Taiwan.4 — 645. $9.914.7 3.9 316.328.381.3 — — 11.742.500.0 32. 2013) (US$ Thousands) _ 129 Region Country Number of Enterprises IFC Loan & Guarantee Participations Total WorlDwiDe Australia Cyprus Finland Greece Israel Italy Portugal Spain Regional Investments: Worldwide Other2 TOTAL 2 7 4 6 1 1 7 5 109 24 5.811.3 185.0 11.233.4m for IFC and $1.InvesTmenT porTfolio Statement of Cumulative Gross Commitments1 (at June 30.1 25.873.0 32.181.198.042.521. Commitments are composed of funds to be provided by IFC for its own account and funds to be provided by participants through the purchase of an interest in IFC’s investment.500.3 1.9 975.902.826.147.9 304. China.3 10.0 960.808.0 40.253.5 6. The balance represents investments in West Bank and Gaza.359.1 20.

IFC. the Multilateral Investment Guarantee Agency. Rounding of numbers may cause totals to differ from the sum of individual figures in some tables. Investment amounts are given in U. dollars unless otherwise specified. and ended on June 30.130 _ IFC Financials anD ProJecTs 2013 NOTES AND DEFINITIONS The fiscal year at IFC runs from July 1 to June 30. participants receive the same tax and country risk benefits that IFC derives from its special status as a multilateral financial institution. The World Bank includes the International Bank of Reconstruction and Development and the International Development Association. The World Bank Group includes IBRD. and the International Centre for Settlement of Investment Disputes. Thus FY13 began on July 1. On-­ lending is the process of lending funds from IFC’s own sources through intermediaries. Loan participants and IFC fully share the commercial credit risks of projects but. because IFC is the lender of record. 2013. such as local banks and micro­ finance institutions. IDA.S. Quasi-­ equity instruments incorporate both loan and equity features. which are designed to provide varying degrees of risk/ return trade-­ offs that lie between those of straight loan and equity investments. 2012. .

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