Mikro ALDI AFS 07

Microcredit organisation “MIKRO ALDI" GORAŽDE
Financial statements for the year
ended December 31, 2007
Microcredit organisation "MIKRO ALDI"
Contents
Page
Responsibility for the financial statements 2
Independent Auditor's Report 3
General information 4
Ratio analysis 8
Financial Statements:
Income Statement 9
Balance sheet 10
Statement of changes in equity 11
Cash flow statement for the year 12
Notes to the Financial Statements 1334
REVIK D.O.O. SARAJEVO
AUDIT, ACCOUNTING AND CONSULTING
Branilaca Sarajeva 20
tel./fax (00387) (33) 200383 and 660571
email: revik@ bih.net.ba
No:200 34 01/08
Date: 08.02.2008.
Responsibility for the financial statements
This statement is issued related to Audit of Financial Statements of Micro landing
organisation MIKRO ALDI for the year ended December 31, 2007.
For the purpose of expressing of opinion do the financial statements give true and fair view
of the financial position of MIKRO ALDI for the year ended December 31, 2007, results of
its operations and cash flow for the period than ended, we as the Management are
responsible for ensuring that financial statements are prepared for each financial year in
accordance with the Law on accounting and Auditing of the Federation of Bosnia and
Herzegovina (Official Gazzette of the Federation of Bosnia and Herzegovina No 32/05) in
accordance with International Financial Reporting Standards (IFRS) and International
Standards of Audit as published by the International Accounting Standards Board (IASB).
After making enquiries, the Management has a reasonable expectation that the bank has
adequate resources to continue in operational existence for the foreseeable future. For this
reason, the Management continues to adopt the going concern basis in preparing the
financial statements.
In preparing those financial statements, the responsibilities of the Organization include
ensuring that:
· suitable accounting policies are selected and then applied consistently;
· judgements and estimates are reasonable and prudent;
· applicable accounting standards are followed, subject to any material departures
disclosed and explained in the financial statements; and
· the financial statements are prepared on the going concern basis unless it is
inappropriate to presume that the Organization will continue in business.
The Management is responsible for keeping proper accounting records, which disclose with
reasonable accuracy at any time the financial position of the Organization and must also
ensure that the financial statements comply with the Accounting Law and Audit of
Federation of Bosnia and Herzegovina. The Management is also responsible for
safeguarding the assets of the Organization and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Signed on behalf of the Management
Ferida Softić, General Director
Safija Pleh, Finance manager
2
REVIK D.O.O. SARAJEVO
AUDIT, ACCOUNTING AND CONSULTING
Branilaca Sarajeva 20
tel./fax (00387) (33) 200383 and 660571
email: revik@ bih.net.ba
To the Board of directors
Micro credit organisation "MIKRO ALDI"
Report of the Independent Auditors
We have audited the financial statements of Micro credit organisation "MIKRO ALDI" –
Goražde for the year 2007. These financial statements are the responsibility of the "MIKRO
ALDI"’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining on a test basis,evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management. as well as evaluating the overall presentation of the
financial statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion. the financial statements present fairly. in all material respects. the financial

position of the Micro credit organisation "MIKRO ALDI" Goražde as at December 31,
2007, and of the results of its operations and its cash flows for the year 2007 in accordance
with International Financial Reporting Standards.
Revik d.o.o. Sarajevo
Enver Mulalić , partner
Edin Udovčić , certified auditor
Sarajevo, 08 February 2008
3
1. General Information
Establishment and activities
Microcredit organization “MIKROALDI” (hereafter Organization) is established in

Federation of Bosnia and Herzegovina in accordance with the Law on microcredit
organizations (“Official Gazette of Federation B&H, number 24/00), under the number
R1M5/00 and it has a license issued by the Federal Ministry of Social Affairs, Displaced
Persons and Refugees to work as a microcredit institution, which provides loans to micro
entrepreneurs (entrepreneurs with low income). This program is part of the overall efforts
to stimulate the economic growth and postwar recovery.
Microcredit project was started as a part of the Association of Citizens for Local Initiatives
(ALDI) in Gorazde. Microcredit operations were initiated with the support of the UNHCR
loan assets project and technical assistance by the Local Initiatives Department until 1999.
After 1999, the microcredit project received additional loan fund from OXFAM and
NOVIB.
Microcredit organization “MIKROALDI” was registered on December 14, 2000 in
accordance with the Law on microcredit organization (“Official Gazette of Federation
B&H, number 24/00), under the number 05435M11796/00 as a nonprofit,
nongovernmental and nondeposit organization.
In accordance with the Decision on establishment from 2000, ALDI is the founder of the
microcredit organization MIKROALDI. ALDI provided the following assets:
1. Founder’s equity in the amount of KM 24,825 (furniture and equipment)
2. Transfer of all rights and liabilities related to microcredit activities: microcredit fund
through contract with UNHCR in the amount of KM 200,000; microcredit fund through
contract with OXFAM in the amount of KM 500,000.
3. In accordance with the Decision of the Board of Directors, Association of Citizens
„ALDI“ as of September 15, 2001 transferred the ownership of KM 104.000 to „MIKRO
ALDI“ into microcredit fund and the Decision is valid as of October 01, 2001.
Main mission and vision of microcredit organization “MIKROALDI” :
Mission MIKRO ALDI mission is to provide suitable financial services to economically
active population with lowincome rate, in order to improve living conditions within local
economies that enables creation of an environment for development of an opened,
democratically orientated society with economically independent population.
Vision The vision of MIKRO ALDI is to become leading microcredit institution in area of
Southeast Bosnia and Herzegovina, and to ensure a positive influence to the global trends
of economy development by its long term presence.
Goal The goal of MIKRO ALDI is to build and develop a long term, self sustainable
institution that will provide microfinance services to lowincome population.
Purpose The purpose of MIKRO ALDI existence is to alleviate poverty among
population through financial services for startup and development of a small business in
order to contribute the global development of economy.
Clients:
Mostly women from BosnianPodrinja and Sarajevo Cantons of Federation of B&H and
southeastern part of Republic Srpska.
Loans are mostly utilized for financing working capital and equipment. The largest portion
of portfolio is invested in agricultural activities followed by trade, service, and smallscale
production.
Credit methodology:
“MIKROALDI” works in accordance with the solidarity group methodology, as well as in
accordance with the individual methodology.
Group crediting means forming of solidarity groups made of 25 women,
microentrepreneurs. All members of the solidarity group are guarantor to each other (no
other form of collateral is used).
Loan sizes grow with each new loan cycle. Loan cycles are from 3 to 36 months, with
monthly repayment of principal and interest (12% up to 18% annually), average 15%.
Following the new Law on microcredit organizations that was adopted at October 4 th 2006,
the Organization plans to adjust its operation with the Law within 12 months after adoption
of the Law. By the end of the 2007 organization did not complete mentioned adjustment
because legislator delay in adoption suporting low acts .( Note 25 ) .
5
Board of directors
1. Ibrahim Imamović President
2. Vesna Nemec – Klisura Member
3. Hasan Đozo Member
4. Mehmed Ćulov Member
5. Adil Tabaković Member
6. Ahmo Ađović Member
7. Elvedina Zec Member
Management Board
1. Ferida Softić General director
2. Safija Pleh Financial manager
3. Selma Pilav Credit manager
Activities of the Organisation are performed through:
1. Central office Goražde, Panorama bb street
2. Branch office Višegrad, Kralja Petra I bb street
3. Branch office Pale, Nikole Tesle bb street
4. Office Foča, Krajiška 20 street
6
Organizational Structure for 2007
7
Ratio analysis
Efficiency ratios 2007 2006
Active loan clients/ number of staff 135 156

Active clients/number of loan officers 207 224
Net outstanding portfolio/number of loan officers 370,030 256.663
Percentage total operating expenses/ Average net portfolio 24,04% 24,52%
Financial ratios 2007 2006
Return on assets: Net operational income/average total assets 7.25 % 7.89%

Return on equity: Net operational income/average equity 16.09% 18.72%
Yield on portfolio: Interest income and/or fees / average net
portfolio outstanding 31.93% 30.69%
8
Income Statement
Year ended Year ended 31
(All amounts expressed in KM)
31 December December
Notes 2007 2006
Interest income and loan fee income 3 1,484,423 1,350,684
Interest expense 3 (200,320) (207,261)
Operating income 3 1,284,103 1,143,423
Operating expenses 4 (810,498) (733,661)

Bad and doubtful debts expense 6 (83,197) (38,618)
Operating expenses (893,695) (772,279)
Other income 7 44,260 43,262
Net operational income/ expense 434,668 414,406

Grant income 8 25,115 14,838
Net income after grants 459,783 429,244
The accompanying notes are an integral part of these financial statements
9
Balance sheet
As at 31 As at 31
(All amounts expressed in KM) Notes December 2007 December 2006
ASSETS
Cash and cash equivalent 10 315,874 95,089

Deposits with banks 11 20,000 185,633
Loans and advances to customers 12 5,595,450 4,106,606
Other assets 13 39,816 39,218
Tangible assets 14 196,433 174,411
Intangible assets 15 3,805 3,429
Total assets 6,171,378 4,604,386
LIABILITIES AND EQUITY
Other liabilities 16 118,790 100,766

Deferred income (donations) 17 85,827 72,933
Liabilities for loans 18 3,309,365 2,233,074
Total liabilities 3,513,982 2,406,773
Assossiation of citizens "ALDI" 19 128,825 128,825

Capitalization 700,000 700,000
Retained earnings 20 1,828,571 1,368,788
Total equity 2,657,396 2,197,613
Total equity and liabilities 6,171,378 4,604,386
10
Statement of changes in equity
Founder's
equity Loan fund Loan Loan
(All amounts
Assossiation Assossiation fund Fund Retained
expressed in KM)
of citizens of citizens UNHCR OXFAM earnings
"ALDI" "ALDI" /(loss) Total
Balance at 31
December 2005 24,825 104,000 200,000 500,000 939,544 1,768,369
Net result for the
period 429,244 429,244
Balance at 31
December 2006 24,825 104,000 200,000 500,000 1,368,788 2,197,613
Net result for the
period 459,783 459,783
Balance at 31
December 2007 24,825 104,000 200,000 500,000 1,828,571 2,657,396
11
Cash flow statement
December 31, December 31,
(All amounts expressed in KM) 2007 2006
Net operational result 459,783 429,244

Depreciation 33,625 32,084
Cash flows from operating profits before changes in operating
assets and liabilities 493,408 461,328
Changes in operating assets and liabilities
Net (increase)/decrease in loans and advances to customers (1,488,844) 188,574
Net (increase)/decrease in other assets (598) 2,401
Net increase/(decrease) in other liabilities 18,024 13,442
Disposal of fixed assets 1,204
Net cash from operating activities (1,471,418) 205,621
Cash flows from investing activities
Purchase of property and equipment (56,023) (37,760)
Net cash from investing activities (56,023) (37,760)
Cash flow from financing activities
Net (increase) / decrease in deposits with banks 165,633 15,766
Net increase /( decrease) in liabilities for loans 1,076,291 (682,799)
Net increase of deferred income 12,894 31,877
Net cash from financing activities 1,254,818 (635,156)
Net increase (decrease) in cash and cash equivalents 220,785 (5,967)
Cash and cash equivalents at beginning of year 95,089 101,056

Cash and cash equivalents at end of the year 315,874 95,089
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Notes to the financial statements
1. Summary of significant accounting policies
The principal accounting policies adopted for the preparation of the Financial Statements of
the "MIKRO ALDI" and principal risks which have to be taken into account when assessing
these accounting policies are set out below:
(a) Risks
Concentration of risks that may have a significant impact on the "MIKRO ALDI" is as
follows:
· Credit risk, the loan portfolio of the "MIKRO ALDI" consists only of micro
enterprises and citizens;
· Direct and indirect dependence of micro entrepreneurs on the economic situation in
the local environment and wider region
(b) Basis of presentation
The financial statements are prepared in accordance with International Financial Reporting
Standards (IFRS). The financial statements are prepared under the historical cost
convention as modified by the fair valuation of availableforsale securities, financial assets
and financial liabilities held for trading and all derivative contracts, if any.
The financial statements are stated in the Federation Bosnia and Herzegovina’s official
monetary unit, Konvertibilna Marka (KM), which is plegged to the Euro (EUR 1 = KM
1.95583).
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(c) Foreign currencies
Transactions denominated in foreign currencies are translated into KM at the official Central
Bank of Bosnia and Herzegovina exchange rate on the date of the transaction. Any gain or
loss resulting from the change in rates of exchange subsequent to the date of transaction is
included in the Statement of Income as a gain or loss from the revaluation of foreign
currency positions.
The exchange rates used for the Financial Statements are the official exchange rates as
issued by the Central Bank of the Bosnia and Herzegovina. As of December 31, the
principal exchange rate is:
(in KM) 2007 2006
1 EUR 1,95583 1.95583

1USD 1,33122 1.485065
(d) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet
when there is a legally enforceable right to set off the recognised amounts and there is an
intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
(e) Interest and Fees Income and Expense
Interest income and expenditures are recognized in income statement on accrual principles.
Anticipated income interest is deffered. Penalty interest is calculated on a cash basis.
Income from basic activity refers to interest income. Financial income irelates to interest
earned on time deposits.
Expenses from operational activity are recognized at the moment of increase in liabilities or
decrease in assets. Financial expenditures are expenditures which include interest on
borrowed assets, loan loss cost, etc.
Interest income and expenses are recognized in the income statement on an accrual basis.
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Interest income is suspended when loans become doubtful of collection by more then 90
days. Interest income is not recognized until received.
Fees consist of fees related to loans. Loan origination fees are amortized to income over the
life of the loan.( Note 17.)
(f) Donations / Grants
Donations / Grants are assistance by government or other parties in the form of transfer of
resources to the organization. These grants are recognised as income, whenever there is
reasonable assurance that the organisation will comply with the conditions attaching to them
(if any) and the grants will be received.
Donations of fixed assets are recorded as long term accruals and released to the income
statement in the same manner depreciation of the related fixed assets is charged to the
income statement.
There were no noncash donations.
(g) In kind donation
In kind donation are benefits or subsidies that the organization receives to support
operations, but which are paid by a third party,
(h) Originated loans and provisions for loan impairment
Loans originated by the Agency by providing money directly to the borrower at draw down
are categorised as Loans and advances to customers and are carried at amortised cost. Third
party expenses are treated as part of the cost of the transaction.
All loans and advances are recognised when cash is advanced to borrowers.
A credit risk provision for loan impairment is established if there is objective evidence that
the Organisation will not be able to collect all amounts due. The amount of the provision is
the difference between the carrying amount and the recoverable amount, being the present
value of expected cash flows including amounts recoverable from guarantees and collateral,
discounted based on the interest rate at inception.
15
The loan loss provision also covers losses where there is objective evidence that probable
losses are present in components of the loan portfolio at the balance sheet date. These have
been estimated based upon historical patterns of losses in each component, the credit ratings
allocated to the borrowers and reflecting the current economic climate in which the
borrowers operate. When a loan is uncollectable, it is written off against the related
provision for impairments, subsequent recoveries are credited to the bad and doubtful debt
expense in the income statement.
If the amount of the impairment subsequently decreases due to an event occurring after the
writedown, the release of the provision is credited to the bad and doubtful debt expense,
In determining the overall level of the provisions required management considers numerous
factors including, but not limited to, the financial condition of the borrower, existence and
quality of collateral, domestic economic conditions, the composition of the loan portfolio
and prior bad debt experience and repayments after yearend.
General provisionings for loans without arrears are 2 %.
The following percentages of provisionings are applied for loans in arrears:
Provisionings
Days in arrears 2007 2006
130 days 20% 20%

3160 days 40% 60%
6190 days 60% 80%
91120 dana 80% 100%
121180 days 100%
>180 days (writte off) 100%
(i) Computer development costs
Costs associated with maintaining computer software programmes are recognised as an
expense as incurred. However, expenditure that enhances and extends the benefits of
computer software programmes beyond their original specifications and lives is recognised
as a capital improvement and added to the original cost of the software. Computer software
development costs recognised as assets are amortised using the straightline method over
their useful lives but not exceeding a period of five years. Costs associated with the
maintenance of existing computer software programmes are expensed as incurred.
16
(j) Property and equipment
Property and equipment is stated in principal at historical cost less depreciation.
Depreciation is calculated on the straightline method to write off the cost of each asset to
their residual values over their estimated useful life as follows:
2007 2006
% %
Buildings 2,0 2.0
Furniture and equipment 1020 10 20
Vehicles 15,5 15.5
Computer equipment 33,33 33.33
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
written down immediately to its recoverable amount. Gains and losses on disposal of
property and equipment are determined by reference to their carrying amount and are taken
into account in determining operating profit. Repairs and renewals are charged to the
income statement when the expenditure is incurred.
(k) Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise of balances
with maturity less than 90 days including cash and amounts due from other banks.
(l) Provisions
Provisions are recognised when the Organisation has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a reliable estimate of the
amount of the obligation can be made.
(m) Reclassification
Certain amounts in the previous year financial statements have been reclassified to conform
with the current year
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2. Risks associated with financial instruments
In the normal course of business, the Organisation provides to its customers a variety of
financial instruments. These financial instruments involve various degrees of risk as follows:
Credit risk
In conducting business activities, the Organisation is exposed to the possibility that
borrowers may default on their obligations to the Organisation, To minimize this risk the
Organisation evaluates each customer’s credit worthiness on a casebycase basis, The
amount of collateral obtained, if it is deemed necessary by the Organisation upon the
extension of credit, is based on credit officer's credit evaluation of the client, Collateral held
varies but may include guarantees, payment orders and acceptance letters, The Organisation
strives to maintain a credit risk profile that is diverse in terms of industry and borrower
concentration,
Market risk
In the normal course of business, the Organisation is exposed to market risks, Market risks
arise from open positions in interest rate and currency, all of which are exposed to general
and specific market movements,
Currency risk
The Organisation may invest in assets denominated in currencies other than its reporting
currency, the convertible mark (KM), Consequently, the Organisation is exposed to risks
that the exchange rate of the convertible mark relative to other currencies may change in a
manner which has an adverse effect on the reported value of that portion of the
Organisation’s assets which are denominated in currencies other than the convertible mark,
Interest rate risk
The Organisation takes on exposure to the effects of fluctuations in the prevailing levels of
market interest rates on its financial position and cash flows, Interest margins may increase
as a result of such changes but may reduce or create losses in the event that unexpected
movements arise,
18
Liquidity risk
Liquidity risk arises from the possibility that the Organisation may be unable to satisfy
current and future financial commitments,
The Organisation is exposed to calls on its available cash resources from maturing loans
received by the Organisation and loan drawdowns, The Organisation does not maintain cash
resources to meet these needs as experience shows that a minimum level of reinvestment of
maturing funds can be predicted with a high level of certainty,
Notes to the Income Statement
3. Net operating income
Interest income and commision
Interest on loans 1,326,831 1,259,140
Loan fee income 157,592 91,544
1,484,423 1,350,684
Interest expense
Cost of capital from NOVIB (71,260) (105,526)
Cost of capital from Raiffeisen Bank Sarajevo (58,707) (37,728)
Cost of capital from NLB CBS Banka (27,628) (24,628)
Cost of capital from DBF Microcredit fond (3,746) (5,824)
Cost of capital from BLUE ORCHARD (19,181) (33,555)
Cost of capital UniCredit Zarebačka Bank (16,075)
Cost of capital Planet Responsibilit Fond (3,462)
(200,320) (207,261)
Net operating income 1,284,103 1,143,423
All income arises within Federation of Bosnia and Herzegovina and Republika Srpska.
Income from loan fees is charged as 2% of the loan amount when loan is issued, and that
income is defferred during the life time of the loan.
19
4. Operating expenses
Staff costs (Note 5) 597,785 538,900

Depreciation 33,625 32,084
Bank services 17,810 11,498
Audit fee 4,680 4,680
Education 11,352 8,829
Maintains of equipment 2,644 2,644
Communication 22,173 17,975
Energy 8,503 8,977
Fuel 45,082 32,148
Insurance of fixed assets 7,466 7,466
Other services
Stationery 6,414 10,161
Advertisement 6,652 6,652
Rent 10,742 9,254
Tax on services
MembershipAMFI 4,134 2,400
Currency exchange differences incomes 8,782 15,766
Other 22,654 24,227
Total 810,498 733,661
5. Staff costs
Wages and salaries (net) 320,201 267,690

Taxes and contribution on salary 203,831 178,589
Travel costs 10,539 10,695
Temporary services contract 17,428 9,587
Food allowance 32,176 57,711
Holliday allowance 13,610 14,628
Total 597,785 538,900
The average number of persons employed by the "MIKRO ALDI" during the 2007 year was
23 (2006 22).
20
The amount of 3,541 KM for salaries and benefits for apprentices was reimbursed from
Bureau for Employment , and these amount did not burden expenses of salaries and
benefits.
The Organization does not have any other retirement packages expect the one through the
retirement system of the Federation of Bosnia and Herzegovina. According to this system,
the employer is obliged to calculate the current contributions in a percentage from current
gross salaries, and expenses debit the income statement in a period in which employees
earned their salaries. The Organization does not have any obligations to pay out retirement
checks to employees in the future. In 2007 MIKRO ALDI did not establish reservation for
the future payment to employees .
Organization does not have obligation to pay out retiremnet checks to employees in 2007 .
Bank is calculated provision regarding expecting future payments to the employees after
retirement in amount of 3 mountly salary's on the level Organization , but did not made
liabilities bacause management have opinion that amount of provision does not represent
material significiant item . ( 0,68 % Organization's profit before taxation in 2007 ) .
In future , organization will calculate provision in accordiance with MRS 19 –Employee
Benefits .
6. Bad and doubtful debts expense
Loans and advances to customers (note 12e) 83,197 38,618

83,197 38,618
21
7. Other income
Income from previously writeoff loans 23,913 24,072

Currency exchange differences expenses 9,625 15.766
Reimbursement from insurance company 8,782 655
Interest on deposits in banks 473 885
Other 1,884
Collected court fees 1,467
Total 44,260 43,262
8. Grant income
Donation from IDB CGAP* 14,516
Donation from NOVIB for fixed assets** 10,599 14,447
Donation from ASSO ENTRADE 391
Total 25,115 14,838
*In 2007 MIKRO ALDI received a reward for the financial transparency in amount USD
10,000 from the C GAP – Conto Assist the Poor ( Counsultiv group for the relif those in
need )
** See Note 17.
9. Taxation
The Organisation is tax exempted in respect of corporate tax according to article 2 of the

Law on Micro Finance Organizations, which determines that micro credit organisations
should be regarded as nonprofit organisations.
22
Notes to the Balance Sheet
10. Cash and cash equivalents
Cash at hand 585 261

CBS NLB Bank 24,771 14,997
Raiffeisen Bank, Goražde 141,303 79,511
Nova Bank, Foča 191 320
EFSE 122,780
UniCredit Zagrebačka Bank 26,244
Total 315,874 95,089
Interest rates on transaction accounts at banks are 0.25 % annually. (2006.:0,3 % annually).
11. Deposits with banks
UniCredit Zagrebačka bank ( Term deposit ) 20,000
CBS NLB Bank (Term deposit) 185,633
Total 20,000 185,633
Term deposit represents restricted deposit at UniCredit Zagrebačka Bank, Mostar , contract
number 4506006140 at 10.09.2007 and is utilized as a guarantee for a loan received from
UniCredit Zagrebačka Bank , number 96/2007/0342 .
Interest on a term deposit is 1,65 % annualy , with maturity of one year .
12. Loans and advances to customers
(a) Portfolio
23
Organization offers four loan products:
Short term loans
Loans for startup of business
Loan for development of business
Loan for VIP clients
Every loan product has its own subproducts for various types of business like agriculture,
fixed or current assets for other businesses.
Loans are granted for the period up to 36 months (2006: generally due within 36 months)
but average repayment period is 19 months ( 2006 : 14.5 mounths ) . Organization does not
have renewed loans.
Number of active clients is 3,100 (2006.:3,590).
Total number of disbursed loans – 2,809 (2006.:3,486).
The percentage of female clients is 78% (2006.: 81%) and male clients 22% (2006.:19 %).
(b) Analysis by interest rates
Interest rate on all extended loans is 12% to18% p.a.
Organization is calculating the interest rate according to declining method. The annual
interest rate is charged monthly and is ranging from 1% to 1.5%, depending on the loan
product and loan cycle.
c) Analysis by type of borrower
Economic sector risk concentrations within the customer loan portfolio were as follows:
Individual production companies 472,764 429,930

Individual trade companies 1,683,936 1,253,595
Individual service companies 1,507,390 843,154
Agriculture 2,078,782 1,676,894
Total (gross) 5,742,872 4,203,573
Specific provision for credit risks (147,422) (96,967)
Total (net) 5,595,450 4,106,606
(d) Geographical analysis
24
As of 31 December 2007 all loans were disbursed to citizens of, or companies incorporated
in the Federation of Bosnia and Herzegovina and Republika Srpska.
Federation BiH 1,580,387 959,964

Republic Srpska 4,162,485 3,243,609
Total (gross) 5,742,872 4,203, 573
Specific provision for credit risks (147,422) (96,967)
Total (net) 5,595,450 4,106,606
(e) Arrears
The amounts of loans in arrears are analysed as follows:
Principal in Principal in
arrears arrears
Current loans 5,641,491 4.166,040

Up to 30 days 62,667 25,277
31 60 days 22,087 6,064
61 90 days 6,264 6,192
91 120 days 4,391
121180 days 5,972
Total 5,742,872 4,203,573
Arrears include all amounts of loan principal due but not collected.
(f) Provisions
25
The movements in provisions for losses are as follows:
Balance at 1 January 96,967 124,615

Doubtful debts expense ( Note 6 ) 83,197 38,618
Bad debts written off (32,742) (66,266)
Balance at 31 December 147, 422 96,967
Mikro Aldi is writing loan offs after 180 days, which in accordance with the Organization’s
business policy.
13. Other assets
Accrued interest receivable 36,413 27,671

Prepaid expenses 1,763 6,502
Other receivables 846 4,213
Consumable stores * 794 832
Total 39,816 39,218
* Consumable stores are written off 50 % when put into use and rest at the end of using
period.
14. Property and equipment
26
(All amounts expressed in KM)
Buildings Furniture & Computer
equipment Vehicles equipment Total
Cost
As at January 1, 2007 106,652 33,391 101,879 47,354 289,276

Additions 7,751 2,081 43,504 53,336
Disposals (5,233) (2,581) (7,814)
As at December 31, 2007 114,403 30,239 101,879 88,277 334,798
Accumulated depreciation
As at January 1, 2007 7,242 25,142 51,878 30,603 114,865

Depreciation 2,173 3,225 15,505 10,411 31,314
Disposals (5,233) (2,581) (7,814)
As at December 31, 2007 9,415 23,134 67,383 38,433 138,365
Net book value as at 31 December 2007 104,988 7,105 34,496 49,884 196,433
Net book value as at 31 December 2006 99,410 8,249 50,001 16,751 174,411
Mikro ALDI posesses busines premise in Goražde of 142 m 2 which net book value is KM
99,410; part of this premise (95m 2 ) was pledged as collateral to Raiffeisen Bank for a loan.
Organization has insurance contracts with Sarajevo Osiguranje against risks of theft, fire
and water accidents.
15. Intangible assets
Software 8,870 8,870

Additions 2,687
Accumulated depreciation (7,752) (5,441)
Total 3,805 3,429
16. Other liabilities
27
Suppliers 24,477 12,456

Salaries (net) 43,801 44,768
Contributions and taxes on salaries 27,914 28,531
Accrued interest payable 17,928 14,296
Other 4,670 715
Total 118,790 100,766
17. Deferred income (donations)
Deferred revenue (fee) * 69,817 46,324

Deffered revenue (donation of fixed assets) (NOVIB) ** 16,010 26,609
Total 85,827 72,933
* Deffered revenue (fee) represents 2% fee collected at extension of loans that will be
recognized as income through repayment period of respective loan (Note 1.e).
Movements during the year are presented bellow:
As at January 1 46,324
Additions 141,376 120,736
Transferred to revenue (Notes 1.e and 3) (117,883) (74,412)
As at December 31 69,817 46,324
** MIKRO ALDI has received a donation in 2002 from NOVIB in amount of KM 80,000
for fixed assets. Income from this donation is recorded in the amount of depreciation.
Movements during the year are presented bellow:
28
As at January 1 26,609 41,056

depreciation of fixed assets (Notes 2,f and 9) (10,599) (14,447)
As at December 31 16,010 26,609
18. Liabilities for loans
a) Analysis by type of loan
NOVIB(1) 552,033 949,067

Raiffeisen bank Sarajevo(2) 1,275,000 305,000
CBS NLB banka (3) 300,000 500,000
UNICREDIT Zagrebačka Bank(4) 400,000
PLANET RESPONSIBILIT FOND(5) 293,374
BLUE ORCHARD (6) 195,583 293,374
DBMD (7) 185,633
EFSE(8) 293,375
3,309,365 2,233,074
(1) NOVIB
MIKRO ALDI signed contract with NOVIB for amount of EUR 512,000 on March 25,
2002. Interest rate is 9 % p.a. Maturity of the loan is 5 years and 9 months with grace
period of 2 years. Repayment started on December 31, 2004.
An additional contract with NOVIB under number FDE503123/L64 was signed for
amount of EUR 300.000 on February 1, 2004. The main condition of the contract is that
the purpose of the loan is lending of loans only to the target population. Interest rate is 8 %.
Maturity of the loan is 5 years with grace period of 1 year on principal.
The guarantee for the both of loan is the portfolio which is separately recorded as NOVIB
assets.
(2) Raiffeisen bank Sarajevo
29
Mikrocredit organization has signed a ANEX 9 on General contract for a loan and business
cooperation with Raiffeisen bank d.d Sarajevo at Decembar 12 , 2007 number OU 5
052/03 and approved :
· Short term loan number 14275/07 at 12.12.2007 in amount of 500,000 KM with
interest rate 7,35 % annualy
· Long term loan number 06766/07 at June 01 , 2007 in amount of 500,000 KM with
interest rate 8 % and with maturity June , 01,2009
· Long term loan number 10224/07 at Septebar 03, 2007 in amount of 400,000 KM
with interest rate 8 % annualy and with maturity Septebar 03 , 2009
Guarantees for this loan are property of the Organization MIKRO ALDI (part of business
premises 95 m 2 ) and business premises of its founder U.G. ALDI 207 m 2 and portfolio from
Raiffeisen bank funds.
(3) CBS NLB bank
At September 13, 2006 MIKRO ALDI has signed a short term revolving contract with NLB
TUZLANSKA BANKA d.d. Tuzla (with possibility of extension of two years) No
101068099 in amount of 500,000 KM at interest rate of 6.45 % annually. Balance of
liabilities towards NLB bank at December 31, 2006 was 500,000 KM.
Guarantees for this loan are depozit of DBMDF in amount of 125,000 USD and portfolio
from NLB Tuzlanska banka funds.
Credit is closed and deposit is returned to the DBMDF at September 11,2007 .
Organization has signed a new short revolvig contract at Septembar 11,2007 .No
101624269/07 in amount of 300,000 KM with maturity Septembar 11,2008 and interest
rate of 7,90 % annualy .
Guarantees for this loan are bills of exchange and cession on credit portfolio beneficiary's of
the Organization .
(4) UNICREDIT ZAGREBAČKA Bank
In 2007 MIKRO ALDI has signed with UniCredit Zagrebacka bank d.d. Mostar two short
term loan contract for the business financing in individually amount of 200,000 KM (
Contract No.14/2007/0342 at February 02 , 2007 and contract No.96/2007/0342 at
Septembar 04 , 2007 ) . These loans are aproved on 12 mounts with interest rate of 7,3%
annualy .
Guaranees for this loans are : bills of exchange of the Organization ( 5 ) , cession to the
bank .
(5) Planet Finance ( Responsability SICAV ( LUX ) MikrofinazFonds )
30
September 11 , 2007 MIKRO ALDI has signed a short term loan for the financing credit
portfolio in amount of 150,000 EUR ( 293.375 KM ) with interest rate of 9 % annualy
contract with Planet Finance ( Responsability SICAV ( LUX ) MikrofinazFonds ) from
Luxemborg . Guarantees for this loan is cession to the lender .
(6) BLUE ORCHARD
MIKRO ALDI has at March 7, 2006 signed a contract with BLUE ORCHARD on short
trem loan in amount of 150,000 EUR with interest rate six months EUROLIBOR plus 6.75
% p.a. Balance of the loan at December 31, 2006. is 150,000 EUR. This credit is returned
at March 03 , 2007 . Blue Orchard is at April 24 , 2007 with a same codition aproved a new
loan to the Organization in amount of 100,000 EUR .
There are no guarantees for this loan.
(7) DBMDF
MIKRO ALDI has signed a contract with Deutsche Bank Microcredit Development Fund at
September 9, 2005 with interest rate of 3 % p.a. for issuing a guarantee deposit in amount
of 125,000 USD to CBSNLB bank. The contract is short term for one year with possibility
of extension and DBMDF issued a approval for extension of the maturity.
(8) EFSE
Mikrocredit organization based on General contract with European Fund for Southeast
Europe ( EFSE ) at Decembar 13 , 2007 has signed a long term loan contract No.XXBAS
ALDI 001 in amount of 600,000 EUR . Loan is approved with interest rate of 8 ,47 % on 3
years and 15 mounts grace period ,with maturity March 22 , 2009 .
MIKRO ALDI repays principal and interest for these loans according to the contracted
repayment schedules.
b) Maturity analysis
Up to 1 year (with possibility of prolongation) 2,242,615 1,681,040

Over 1 year 1,066,750 552,034
3,309,365 2,233,074
31
19. Founder’s equity
Since the "MIKRO ALDI" is a nonprofit organisation. There is no share capital issued, but
in accordance with Low about Micro credit organisation it has founders equity,
20. Retained earnings/(loss)
(a) Movement schedule
Balance as at 1 January 1,368,788 939,544

Net result of the year (before donations) 434,668 414,406
Donations from NOVIB and others 25,115 14,838
Balance as at 31 December 1,828,571 1,368,788
(b) Distribution of the profit
The profit of the micro credit organisation has to be used for the micro credit activities.
21. Related party transactions
There were no related party transactions during the 2006 and 2007. Organization does not
have internal loans. Organization has rules about conflict of interests which does not allows
issuing of loans to employees or to members of the Boards.
22. Directors’ remuneration
A listing of the members of the Management Board is shown on page 7 of the Financial
Statements. In 2007 the total remuneration of the management amounts KM 115,880
(2006: KM 114,986). The Board of Directors as shown on page 6 of the Financial
Statements has not received any remuneration in 2006 and 2007 years .
32
23. Maturity analysis
The amount of total assets and total liabilities analyzed by maturity at December 31, 2006
is as follows (KM):
Demand From 6
(Including Up to 6 months to Over 1 Total
arrears) months 1 year year 2007
ASSETS
Cash and cash equivalents 315,874 315,874
Deposits with banks 20,000 20,000
Loans and advances to customers 76,427 456,744 983,920 4,078,359 5,595,450
Other assets 36,413 2,609 794 39,816
Property, plant and equipment 196,433 196,433
Intangible assets 3,805 3,805
TOTAL ASSETS 428,714 459,353 1,004,714 4,278,597 6,171,378
LIABILITIES
Other liabilities 100,862 17,928 118,790
Deferred income (donations) 16,010 69,817 85,827
Liabilities for loans 50,000 809,927 1,382,688 1,066,750 3,309,365
TOTAL LIABILITIES 150,862 827,855 1,398,698 1,136,567 3,513,982
TOTAL ASSETS /
LIABILITIES 277,852 (368,502) (393,984) 3,142,030 2,657,396
33
24. Currency analysis
The amount of total assets and total liabilities analysed by currency at December 31, 2006 is
as follows (KM):
KM EUR Total
ASSETS
Cash and cash equivalent 315,874 315,874
Deposits with banks 20,000 20,000
Loans and advances to customers 5,595,450 5,595,450
Other current assets 39,816 39,816
Property, plant and equipment 196,433 196,433
Intangible assets 3,805 3,805
TOTAL ASSETS 6,171,378 6,171,378
LIABILITIES
Other liabilities 118,790 118,790
Deferred income (donations) 85,827 85,827
Liabilities for loans 1,975,000 1,334,365 3,309,365
TOTAL LIABILITIES 2,179,617 1,334,365 3,513,982
TOTAL ASSETS / LIABILITIES 3,991,761 (1,334,365) 2,657,396
Having in mind that local currency (KM) is linked to EURO, there is no foreign exchange
risk exposure (Bosnia and Herzegovina applies “Currency Board” Principle that is based on
EUR).
25. Post Balance Sheet Events
In procedure with Federal Ministary of Justice is adoption of Regulation about Regulation
changes , modality's of maintain register foudation and foregin ungoverment organization .
No events have occurred since the balance sheet date, which significantly affect the state of
affairs of the Organisation at the balance sheet date or which require additional disclosure.
34

Mikro ALDI AFS 07

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Mikro ALDI AFS 07

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Microcredit organisation “MIKRO ALDI" ­ GORAŽDE

In our opinion. the financial statements present fairly. in all material respects. the financial

Microcredit organization “MIKRO­ALDI” (hereafter Organization) is established in

Efficiency ratios 2007 2006

Active loan clients/ number of staff 135 156

Financial ratios 2007 2006

Return on assets: Net operational income/average total assets 7.25 % 7.89%

Interest income and loan fee income 3 1,484,423 1,350,684

Interest expense 3 (200,320) (207,261)

Operating income 3 1,284,103 1,143,423

Operating expenses 4 (810,498) (733,661)

Operating expenses (893,695) (772,279)

Other income 7 44,260 43,262

Net operational income/ expense 434,668 414,406

Net income after grants 459,783 429,244

Cash and cash equivalent 10 315,874 95,089

Other liabilities 16 118,790 100,766

Assossiation of citizens "ALDI" 19 128,825 128,825

Total equity and liabilities 6,171,378 4,604,386

Net operational result 459,783 429,244

Net increase (decrease) in cash and cash equivalents 220,785 (5,967)

Cash and cash equivalents at beginning of year 95,089 101,056

(in KM) 2007 2006

1 EUR 1,95583 1.95583

1­30 days 20% 20%

(All amounts expressed in KM) 2007 2006

Net operating income 1,284,103 1,143,423

(All amounts expressed in KM) 2007 2006

Staff costs (Note 5) 597,785 538,900

Total 810,498 733,661

(All amounts expressed in KM) 2007 2006

Wages and salaries (net) 320,201 267,690

Total 597,785 538,900

(All amounts expressed in KM) 2007 2006

Loans and advances to customers (note 12e) 83,197 38,618

(All amounts expressed in KM) 2007 2006

Income from previously write­off loans 23,913 24,072

Total 44,260 43,262

(All amounts expressed in KM) 2007 2006

Total 25,115 14,838

The Organisation is tax exempted in respect of corporate tax according to article 2 of the

(All amounts expressed in KM) 2007 2006

Cash at hand 585 261

(All amounts expressed in KM) 2007 2006

Total 20,000 185,633

(All amounts expressed in KM) 2007 2006

Individual production companies 472,764 429,930

(All amounts expressed in KM) 2007 2006

Federation BiH 1,580,387 959,964

(All amounts expressed in KM) 2007 2006

Current loans 5,641,491 4.166,040

(All amounts expressed in KM) 2007 2006

Balance at 1 January 96,967 124,615

Balance at 31 December 147, 422 96,967

(All amounts expressed in KM) 2007 2006

Accrued interest receivable 36,413 27,671

Total 39,816 39,218

As at January 1, 2007 106,652 33,391 101,879 47,354 289,276

As at January 1, 2007 7,242 25,142 51,878 30,603 114,865

Net book value as at 31 December 2007 104,988 7,105 34,496 49,884 196,433

Net book value as at 31 December 2006 99,410 8,249 50,001 16,751 174,411

(All amounts expressed in KM) 2007 2006

Microcredit organisation “MIKRO ALDI" GORAŽDE

Microcredit organization “MIKROALDI” (hereafter Organization) is established in

130 days 20% 20%

Income from previously writeoff loans 23,913 24,072

TOTAL ASSETS / LIABILITIES 3,991,761 (1,334,365) 2,657,396