ANNEX 4
FINANCIAL HIGHLIGHTS
The information presented below has been extracted from OFID’s audited financial statements as of December 31, 2018, and provides basic and preliminary information on OFID’s financial position. A full version of the financial statements is available at
www.ofid.org
Basis of presentation
OFID’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standard Board (IASB).
Summary of the notes to the financial statements
• Accounting standard
OFID has adopted IFRS 9 (Financial Instruments) and IFRS 13 (Fair Value) as the basis for measurement of its financial assets.
• Development financing instruments
In line with its mandate, OFID provides development financing and grants to its partner countries. Public sector loans represent OFID’s main financing window (72% of its development operations and 48% of total assets). These are sovereign loans extended to low- and middle- income countries to finance develop- ment projects. The Lending Programs
provide general guidelines and policies for resources allocation decisions, 2018 was the second year of OFID’s 20th Lending Program. Fixed or variable interest loans that enable partner countries to top up their allocations in the Lending Program are provided through the Blend Facility.
Private sector loans include medium and long-term loans to private sector entities in developing countries on market-based terms and conditions.
The trade finance facility consists of short and medium-term, market- based loans issued to sovereigns and commercial entities in partner countries to finance national and international trade and its related logistics. Additionally, OFID facilitates international trade, through trade finance guarantees, by partnering with several other financial institutions to confirm letters of credit issued by local banks in partner countries.
Equity investments are positions taken by OFID in private enterprises in furtherance of its development operations in partner countries. They are long term in nature but they also have defined exit strategies.
Grants are technical assistances by OFID in the form of transfer of resources directly or through a partner institution to a beneficiary.
• Cash management
Cash, call and deposit accounts are managed in-house to provide
liquidity for operational disburse- ments and administrative expenses. It is OFID’s policy to place deposits only with banks having a minimum ‘A’ rating assigned by internationally recognized credit rating agencies.
• Treasury investments
Treasury investments consist principally of trading portfolios that are actively managed by external managers. The securities in OFID’s trading portfolios are carried and reported at their publicly quoted prices (Level 1 in the fair value hierarchy). Both realized and unreal- ized gains/losses are recognized in the income statement of the year in which they arise.
• Account receivable
Account receivable comprises accrued interest and fees as well as receivables relating to Member Countries’ contributions. The latter represents amounts due from Member Countries on called contributions. In 2013, OFID started to receive contributions pledged by Member Countries under the 4th Replenishment, which continued during 2018.
• Property and equipment
OFID’s property and equipment assets comprise freehold land and buildings, motor vehicles, computer software, furniture and fixtures, and technology and office equipment.
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