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4
Administration
Financial Management
This year’s program of financial operations focused
on producing safe returns and sufficient financial liquidity
to support the TaiwanICDF’s operational requirements,
all whilst acting in accordance with the organization’s
investment principles. The principal factors that we take
into account as part of our financial management are fund
safety, stable earnings and adequate working capital,
in readiness to provide the funds required to implement
our development projects and operations. Continuing to
practice conservative asset allocation in the future will
allow us to withstand financial risks and pursue earnings
that exceed projections.
Fund Utilization
The TaiwanICDF’s fund balances (the Fund) are
derived predominantly from two sources: the founding
fund and donated fund; and accumulated earnings.
The Fund is used to engage in reimbursable
international cooperation and development projects,
such as long-term investment and lending development
projects.
To enhance the effectiveness of fund utilization, an
uncommitted portion of the Fund is set aside and invested
in a portfolio of financial instruments. Such investments
mainly take the form of fixed-income instruments, such
as bonds, bank deposits and short-term investments,
supplemented by a smaller number of risk-bearing
instruments in the form of exchange-traded funds.
Annual earnings are derived from interest and
revenues accrued both from long-term investment or
lending development projects and from investments in
financial instruments, and are used to finance technical
cooperation projects on a non-reimbursable basis, as well
as operational expenses.
As of December 31, 2014, the total outstanding amount
for long-term investment and lending development
projects comprised 37 percent of total fund balances,
while 63 percent was allocated to a portfolio of financial
instruments (financial investments).
Accounting for commitments made but not yet
outstanding, long-term investment and lending
development projects comprised 52 percent of total fund
balances, while 48 percent was allocated to financial
investments. During the year, long-term investment and
lending development projects yielded returns of 1.73
percent; financial investments yielded returns of 1.97
percent. The overall rate of return for the Fund, excluding
foreign exchange gains (losses) and other income
(expenses), was 2.01 percent. Accounting for foreign
exchange gains (losses) and other income (expenses),
the overall rate of return for the Fund was 2.43 percent.
Annual revenue, excluding foreign exchange gains
(losses) and other income (expenses), was NT$307.88
million. Accounting for foreign exchange gains (losses)
and other income (expenses), annual revenue was
NT$381.00 million, an increase of NT$106.50 million, or
38.8 percent, compared to NT$274.50 million for 2013.
Management of Long-term Lending and
Investments
As of December 31, 2013, the TaiwanICDF was
committed to 13 long-term investment projects, for which
the balance of investments stood at US$58.96 million and
NT$130 million. The organization was also overseeing
84 lending development projects with commitments
amounting to US$482.45 million, AUS$20.23 million and
€56.55 million. Accumulated loan disbursements stood
at US$469.76 million, AUS$3.07 million and €20.84
million, equivalent to 86.53 percent of commitments;
total principal repayments stood at US$373.23 million,
equivalent to 74.30 percent of all funds extended. In
2014, the rate of return on lending development projects
was 2.55 percent, a fall of 0.12 percent compared to 2.67
percent in the previous year, while the rate of aggregated
return on both lending development and long-term
investment projects was 1.73 percent, a fall of 0.16
percent compared to 1.89 percent in the previous year.
Annual revenue derived from lending development
and long-term investment activities was NT$99.64 million,
a difference of NT$12.71 million compared to NT$112.35
million for 2013. At the end of 2014, allowances for
bad debts of NT$105.95 million were made (covering
receivables, long-term loans and collections) in
compliance with the organization’s provisions on long-
term loans, receivables, overdue payments and other
asset classes and reflecting the quality of certain assets.
Management of Uncommitted Funds
The financial investment of the uncommitted portion of
the Fund is designed to increase the efficiency with which
funds are used and thereby increase the TaiwanICDF’s
revenues. Financial investments focus mainly on fixed-
income assets, supplemented by a smaller number of
risk-bearing instruments in the form of exchange-traded
funds, as well as long-term holdings of equities.
The TaiwanICDF’s fixed-income assets include bonds
and time deposits denominated in NT dollars and foreign
currencies. With the U.S. government’s program of
quantitative easing having been brought to a close this
year, and with expectations of a formal hike in interest