BDC Results Announcement for the Year Ended June 2014- “BDC journey to recovery begins”

Financial Performance In the year under review the Group's financial performance showed steady gains. The Group realised a Profit Before Tax of P35.7million representing a 166% increase over the prior year. The Group’s statement of financial position also grew by a healthy 15% to P3.6 billion from P3.2 billion while the net assets of the company were P2.5 billion, a 12% increase on the previous year.

Revenue for the BDC Company grew from P101.7 million to P150.4 million representing a 48% increase from the previous year. The Group’s revenue, however, declined by 10% from P317.9 million in the previous year to P286.8 million in the current year. The slow-down in revenue at the group level reflects the challenges and changes that the organisation is managing within its subsidiary and associate company structures. At a company level, BDC experienced a loss before tax of P67.1 million against a loss before tax of P222.2 million in the previous year.

This loss at a company level is substantially less than the loss in the previous year and is reflective of key initiatives to manage operating costs and improve collections. Indeed, despite incurring expenses of the remodelling exercise, total expenses for the Corporation were reduced by 25% which is reflective of key initiatives to manage operating costs. Whilst the net loss for the group was P7.8 million, a total comprehensive income of P215 million was achieved compared to P107 million in the previous year after taking into account the net gains on investments and revaluation of property, plant and equipment.

This steady financial improvement is a positive development and demonstrates that the Re-Modelling Programme that begun towards the end of the year displayed early signs of success. Business Remodelling The commencement of BDC's Business Re-Modelling Programme began in October 2013. This unprecedented exercise looked at ways to nurture a new corporate culture and introduce new ways of working, partnering, and executing.

Implementation of the programme begun in April 2014 with the objectives of reducing wastage, preserving cash, preserving the integrity of the balance sheet, and creating a platform for sustainable and viable growth. Priority areas for improvement included: financial restructuring, review of Legal and Governance frameworks, organisational structure review, process redesign, and the introduction of best practise risk management policies and frameworks.

In the current financial year, BDC will bed-down many of the changes that will be necessary for the Corporation to achieve long term success. The Corporation is confident that through this re-modelling programme BDC will not only rebuild trust with its stakeholders, but will also emerge as the leading investment company in Botswana and the region. Strategy BDC’s Strategic Plan centres on a single, unifying Strategic Goal of “doubling the business in 5 years”.

Going forward BDC will focus on commercially viable projects that:

1. Pioneer new industries
2. Unlock value in existing industries
3. Stimulate private sector growth and linkages
4. Drive diversification and exports
5. Create significant employment
6. Generate wealth from outside the country.

The journey will be challenging and we look forward to working with the Board, shareholder, and the business community on the important and urgent task of transforming BDC into a profitable and sustainable development finance institute.