Segment Reporting by Operating Segments
FMO's primary goal is development impact. A sector based approach on Financial institutions, Energy, Housing and Agribusiness, food & water is leading in the strategy to optimize development impact. The company product range includes commercial loans, equity investments and guarantees. The services rendered are related to funds managed on behalf of the Dutch State and catalyzing funds (such as syndications). FMO's primary segmentation is the sector based approach because strategic and operating decisions by the Management Board are made based upon this segmentation. Besides the focus sectors the segments Diverse sectors and Treasury are distinguished for segment information reporting purposes as well. For information about the performance of the different product and services reference is made to the paragraph 'Information about products and services'.
For the measurement of profit and loss items per operating segment, FMO has followed its accounting policies, which are stated under the 'accounting policies' paragraph. In general the allocation of revenues and expenses to the segments is based upon the sector classification of financing projects. In addition to this, the funding costs (interest expenses) related to commercial loans are allocated to the segments based on an internal allocation model as FMO does not attract its funding on an individual operating segment base. Furthermore, the interest free shareholders' equity is allocated as funding to the company's equity investments and interest-bearing securities portfolio. The company holds an interest-bearing securities portfolio for liquidity purposes and therefore the related interest income is allocated to the segment Treasury.
In 2011, there were no transactions between the operating segments. During 2011, the company decided to add an additional sector Agribusiness, food & water to the focus sectors. As a result, the segment reporting now also includes this segment. The segment Diverse sectors includes financing of projects outside the focus sectors mainly via partnerships. The segments include diverse products and services. The segment Financial institutions includes (private equity) investment funds, which are reported separately in the following table.