2012 Financial Statements

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1 2 012 Financial Statements

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3 Contents 1 Financial Statements 2012 MSF-Holland Association 5 Statement of Expenditure and Income for Balance Sheet as at 31 December Cash Flow Statement for Explanation Statement of Expenditure and Income in Explanation of the Balance Sheet 39 4 Accounting Principles 51 5 Partnerships 57 6 Long-term Forecast 63 7 Other information 67 3

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5 1 Financial Statements 2012 MSF-Holland Association MSF-Holland Association The Association MSF-Holland was founded September 7, 1984 and is based in Amsterdam, the Netherlands. The objective of the Association is: The organizing of practical medical aid to people in disaster areas and crises worldwide, in accordance with the principles expressed in the Charter. Based on its medical work, the Association will also make every effort towards effective advocacy on behalf of the section of the population that it aids. The 2012 Annual Financial Statements include the financial information of the Association MSF-Holland and the activities carried out under its responsibility. MSF-Holland is part of the international network of Médecins Sans Frontières. In addition to MSF-Holland four other MSF-sections carry out projects independently. Each MSF-section is an independent economic and legal entity. The MSF-sections are united in the Swiss-based association Médecins sans Frontières International. The Association MSF-Holland is registered with the Amsterdam Chamber of Commerce under number The Association MSF-Holland is a member of the Association of Fundraising Institutions (VFI) and is certified by the Central Bureau for Fundraising (CBF). The conditions for CBF certification can be consulted on Guidelines This report has in particular been prepared in accordance with Guideline 650 for the Reporting of Fundraising Institutions (revised 2011), as published by the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving) in January The purpose of the Guideline 650 is to provide insight in the raising of funds and the realised expenditure on the objectives for which the funds were raised. In various parts of the Financial Statements, reference is made to the guidelines and recommendations of the Association of Fundraising Institutions (VFI). These certifications can be consulted on In view of the fact that the MSF-sections have become increasingly interdependent, these Financial Statements include a chapter Partnerships. This chapter describes the mutual agreements made between the sections, the financial flows, intersectional governance, and the related risks resulting from these interdependencies. Effort has been made to make the related financial cash flows within the MSF-network as transparent as possible in these Financial Statements. The Charter and more comprehensive information about the organisation are published on the website of MSF-Holland ( and in the Annual Report of MSF-Holland. The Annual Report is published on the website ( A summary explanation of the Financial Statements is included in the Annual Report. 5

6 Changes in accounting principles - inheritances In 2012 accounting policies with respect to the valuation of income from inheritances changed. Until 2012 income from inheritances was recognised as soon as a fair assessment of the proceeds could be made based on the stage of settlement of the inheritance. As of 2012, inheritances are recognised on acceptance, based on the documentation received and an assesment of actual historical realisations for a percentage of the estimated value. At the end of 2012 this estimate was 75% (2011 not applicable). Deviations from this estimate are processed at the time of receipt of settlement of the inheritance. The estimate may be reviewed for time to time. The effect of this change is processed directly into the reserves and funds. The effect of the valuation change can be quantified as follows: Explanatory notes Valuation inheritances applying the new accounting policy see note 3.6 6,236 7,417 Valuation inheritances applying the prior accounting policy Difference in valuation between new and prior accounting policy 5,445 6,996 The effect on the individual item income from own fundraising: inheritances (note 2.10 to these Financial Statements) can be quantified as follows: 2012 Amount of income when applying new accounting policies 9,602 Amount of income when applying prior accounting policies 11,153 Effect on the item income from legacies (less income in 2012) -1,551 The effect of this change in accounting policies is recognised directly within the reserves and funds. The 2011 figures as at 31 December have been adjusted for comparability purposes. Presentation In view of the fact that the Association MSF-Holland considers the expenditures on the Association s goals to be its principle objective, it has been decided to deviate from the prescribed model for the presentation of income and expenditure. These Financial Statements show the expenditures before the income. The Statement of Expenditure and Income is shown before the Balance Sheet. 6 The basis used for the valuation of the expenditure, the assets and the accounting principles are explained in chapter 4 of the Financial Statements. It is recommended that this be read before viewing the Statement of Expenditure and Income and the Balance Sheet.

7 EXPENDITURE Spent on Association Goals Explanatory notes 2012 Budget Direct aid , , ,475 Preparation and coordination in the Netherlands ,723 11,643 11,183 Information and awareness raising 2.3 2,353 2,669 2,133 Commissioned to third-parties 2.4 4,665 4, Total spent on Association goals 159, , ,254 Fundraising expenses Costs own fundraising 2.5 6,806 6,810 6,576 Costs third party fundraising activities Costs acquisition institutional donor grants Total fundraising expenses 7,512 7,525 7,259 Management and administration 2.8 3,932 3,858 3,516 Total expenditure , , ,029 INCOME Income from own fundraising ,733 43,679 43,165 Income from third-party activities ,489 1, Proceeds from the National Postcode ,500 13,500 13,500 Lottery Grants from within the MSF-network ,290 83,392 94,192 Grants from institutional donors ,562 24,775 17,610 Other income ,584 1,000 1,553 Total income 172, , ,995 RESULT OPERATIONAL ACTIVITIES 944-5,233 5,966 Exchange rate results - income RESULT EXPENDITURE AND INCOME 1,122-5,233 6,872 continued on page 8 Statement of Expenditure and Income for 2012 in Euro thousands 7

8 brought forward from page 7 Allocation of the result Explanatory notes 2012 Budget Additions/withdrawals to: Continuity reserves 3.9 a 5, ,000 Appropriation reserves 3.9 b 1, ,077 Other free reserves 3.9 c -5,236-5,233-1,553 Appropriated funds 3.9 d ,652 1,122-5,233 6,872 The expenditure ended around the budgeted level when at the same time the income was higher than planned for. The income from the MSF-Network remained almost at the 2011 level whilst a bigger decrease was foreseen. The income from institutional donors increased compared to 2011 although a bigger increase was budgeted. An important provision for tax dues was reversed following a positive ruling of the concerned government. Overall this resulted in a surplus of 1,122,375 while a deficit was budgeted. After the addition of the result from 2012, MSF-Holland s reserves reached a level of 8.5 months (2011: 8.9 months) in relation to the average expenditure over 3 years. The other free reserves decreased due to the addition of 5.0 million to the continuity reserves (see note 3.8 a) and an increase of the appropriation reserves. The Board is committed to responsibly disbursing the other free reserves on emergency aid in the coming years. This intent has been already taken into account in the 2013 budget and the forecasts for 2014 and 2015 (see chapter 6.1) by budgeting higher expenditure and deficits. The main expenditure indicators for 2012 and the result of these indicators over the past five years are presented in the table: internal Indicators standard Expenditure on operational activities as a percentage of total expenditure 93% 93% 93% 91% 92% min. 85% Expenditure on operational activities as a percentage of total income 93% 90% 80% 83% 85% min. 90% Total expenditure as percentage of total income 99% 97% 86% 91% 93% n/a Cost of own fundraising as a percentage of total income own fundraising 15.6% 15.2% 12.7% 17.2% 16.5% max. 20% Cost of management and administration as a percentage of total expenditure 2.3% 2.1% 2.7% 3.2% 2.8% max. 3% Total spent on Association goals as a percentage of total expenditure 93% 93% 93% 82% 85% min. 80% 8

9 ASSETS Explanatory notes 31 December December 2011 Tangible fixed assets Operating assets 3.1 a 1, Real estate 3.1 b Stocks Stocks for direct aid 3.2 4,319 3,335 Receivables and accrued income Third-party appeals 3.3 1,489 0 Médecins Sans Frontières network ,790 12,908 Institutional donors 3.5 4,533 7,555 Receivable from inheritances 3.6 6,236 7,417 Other receivables and accrued income 3.7 3,327 3,203 28,375 31,083 * Cash at bank and in hand ,005 99,914 Total assets 137, ,397 * LIABILITIES Reserves and funds Reserves 3.9 Continuity reserves 85,000 80,000 Appropriation reserves 5,941 4,400 Other free reserves 28,619 33,855 * 119, ,255 * Funds 3.9 d Appropriated funds Short-term liabilities ,022 16,220 Total liabilities 137, ,397 * (*) Figures have been changed for comparability purposes as the accounting principles for the recognition of income from Inheritances have been changed Balance Sheet as at 31 December 2012 in Euro thousands 9

10 Cash flow from operating activities 31 December December 2011 Receipts: Contributions, (charitable) donations and gifts 33,206 31,810 Legacies and bequests (inheritances) 10,855 11,682 Grants from private organisations Total received from own fundraising 45,030 44,011 Receipts from the National Postcode Lottery 13,500 14,667 Received from MSF-Germany 31,944 39,865 Received from MSF-United Kingdom 14,708 12,880 Received from MSF-USA 13,556 8,698 Received from MSF-Canada 10,333 11,693 Received from other MSF-sections 20,730 16,733 Total received from MSF-sections 91,271 89,869 (concerning project grants) Received from institutional donors 20,521 18,057 Interest received 1,537 1,449 Received tax net and VAT Received from MSF-sections for monies advanced 2,042 1,520 Other receipts Total other receipts 3,920 3,596 Total receipts 174, ,200 continued on page 11 10

11 brought forward from page December December 2011 Transport: Total receipts 174, ,200 Payments: Payments made in project countries 84,616 78,333 Commissioned to third parties Grant to MSF-Spain 4,000 0 Payments to MSF-Germany 2,033 2,001 Payments to MSF-USA 2,011 1,967 Payments to MSF-Canada 1,786 1,682 Payments to MSF-United Kingdom 1,665 1,955 Payments to MSF-International (including contributions) 762 1,403 Payments to other MSF-sections 3,984 3,939 Payments to MSF-Supply and MSF-Logistique 8,364 8,544 Payments of grants received on behalf of other MSF-sections Total payments to MSF-sections 24,605 21,735 Payments to suppliers of goods and services 40,149 45,787 Payments concerning (field) personnel 20,989 20,590 Other payments 0 0 Total payments at headquarters 61,138 66,377 Total payments 170, ,655 Cash flow from operating activities 3,813 3,545 Cash flow from investment activities Payments concerning investments in tangible fixed assets Receipts from disinvestments Cash flow from financing activities Not applicable 0 0 Total cash flow 3,309 3, Cash Flow Statement for 2012 in Euro thousands

12 brought forward from page December December 2011 Transport: Total cash flows 3,309 3,245 Adjustment for exchange rate differences Movement in liquidity position 3,091 3,616 Movement in liquidity position Liquidity position at the end of the financial year 103,005 99,914 Liquidity position at the beginning of the financial year 99,914 96,298 Movement in liquidity position 3,091 3,616 The Cash Flow The Cash Flow Statement has been prepared according to the direct method in order to provide a clearer view of the different flows of funds in the organisation. The cash flow between MSF-Holland and the MSF-sections is visible. The Cash Flow Statement also clearly shows which part of the expenditure has been made in the countries in which projects are being carried out. The receivables decreased while stocks and operating assets as well as the short-term liabilities increased. This explains the difference between the movement in liquidity position and the Result Expenditure and Income. Receipts Receipts from the MSF-sections concern project grants. Receipts from project grants (from MSF-sections and institutional donors) are explained in more detail in note 3.4 and note 3.5 of these Financial Statements. The item Received from MSF-sections for monies advanced consists of receipts referring to employees of MSF-Holland that are seconded to another MSF-section and advances to other MSF-sections for emergency aid projects. The payments to MSF-International concern contributions to office and internationally coordinated activities and projects such as the campaign Access to Essential Medicines and the MSF-International fund for (medical) innovation in aid projects. The payments to the MSF-Network concern remuneration for hired-in employees posted to and working in the project countries. Employees posted abroad receive a contract of employment in the country in which they were recruited. In 2012 the payments remained with 11.5 million at the same level as in 2011( 11.5 million). Pension contributions, social security payments, income tax, and salaries have been included in the payments concerning the (expatriate) staff. The payments to the purchasing organisations MSF-Supply (Belgium) and MSF- Logistique (France) are included as payments within the MSF-network. Mainly vehicles, medicines and specialised supplies are purchased through these procurement centres/depots of MSF-Belgium and MSF-France. Major advantages of scale are obtained through joint procurement, and stocks of aid supplies are more efficiently maintained within the international organisation. In 2012, a total of 8.8 million (2011: 8.6 million) was ordered from these purchasing organisations. Payments The majority of payments made in the project countries are to local personnel. Transport and storage costs and locally purchased medical and nutritional materials are the next largest items. Given the current structure of the projects, amply half of the expenses for the projects are incurred in the countries or the regions where these are being carried out. 12

13 2 Explanation Statement of Expenditure and Income in 2012 This chapter explains the expenditure and income in the sequence of the Statement of Expenditure and Income. Note 2.9 shows the total of all costs with the relevant explanations. Note 2.10 onwards gives an explanation of income. The amount spent on operational activities was 93% of the total expenditure (2011: 93%) and 93% of the total income (2011: 90%). The total cost of own fundraising increased in 2012 from 15.2% to 15.6% of the amount raised, but remains substantially under MSF-Holland s internal indicator of 20% and the CBF norm of 25%. The amount spent on management and administration in 2012 was 2.3% of the total expenditure (2011: 2.1% ). Displacement of people (fleeing from violence) also prompted MSF-Holland to provide assistance for refugees and displaced in Iraq (fleeing from Syria) and in the Democratic Republic of Congo. MSF-Holland also responded to outbreaks of measles in the Democratic Republic of Congo. In Chad MSF-Holland responded to nutritional needs and outbreaks of meningitis. The cholera in Haiti flared up again and we extended our capacity to meet the needs. In Pakistan additional activities were deployed in response to floods. A new emergency aid project was opened in Yemen providing hospital care. In Afghanistan preparations were made to open emergency aid projects again in More information on emergency aid projects is published on the website: www. artsenzondergrenzen.nl/annualreport. Additional management indicators used by MSF-Holland can be found in chapter 6 of these Financial Statements and in the Annual Report. 2.1 Emergency aid The costs of direct emergency aid relate to projects carried out or being carried out by MSF-Holland. This note gives an explanation concerning the costs of emergency aid per country and the division of these costs per country. The expenditure on emergency aid increased by 1.0 million, from million in 2011 to million in This increase is in line with the budget. During the year the budget for unplanned emergency aid projects was allocated to emergencies. South Sudan experienced unrest at the border between Sudan and South Sudan, leaving a large population displaced in very distressing circumstances. MSF-Holland with the other MSF-sections responded with major emergency aid interventions providing basic health care and treatment of cholera. Expenditure 2012 in Euro thousands 13

14 Medical and logistical personnel posted National personnel Medical materials Building materials and sanitation facilities Costs emergency aid Afghanistan Bangladesh ,345 2,457 2,636 Central African Republic 1,664 1, , ,462 4,953 6,066 Chad 1,877 1,808 1, , ,096 4,033 7,039 Colombia ,597 2,730 3,999 DR Congo 4,644 6,155 3,838 1,201 1,146 2,934 1, ,601 16,728 18,033 Ethiopia 2,030 2,358 1, , ,400 9,065 9,239 Haiti 1,095 5,107 1, ,440 6,325 11,093 India 1,093 1, ,797 4,027 4,018 Iraq ,510 1,660 1,658 Ivory Coast ,097 Kenya-LCN Liberia ,424 Myanmar 1,341 3,540 4, ,943 11,557 11,803 Nigeria 1,847 2,799 2, ,267 9,413 7,332 Pakistan 1,407 1,816 1, ,425 5,231 4,326 Papua New Guinea 1,117 1, ,342 3,105 2,595 Russia 442 2,420 1, ,491 4,391 3,731 Somalia 519 3, , ,607 8,238 8,089 Somaliland ,036 2,484 Sri Lanka ,039 South Sudan 4,830 5,014 3,041 1, , ,103 11,798 11,697 Swaziland 625 1, ,528 3,933 3,504 Tajikistan ,314 1, Uganda ,674 Operational costs Transport, storage and vehicles Training and support for local institutions Auditing, advising and support of projects Other general costs Project costs 2012 Budgeted project costs 2012 Project costs 2011 Transport: Subtotal costs emergency aid 27,690 42,181 23,229 6,326 6,217 18,432 2, , , ,323 continued on page 15 14

15 brought forward from page 14 Medical and logistical personnel posted National personnel Medical materials Building materials and sanitation facilities Transport: Subtotal costs emergency aid 27,690 42,181 23,229 6,326 6,217 18,432 2, , , ,323 Operational costs Transport, storage and vehicles Training and support for local institutions Auditing, advising and support of projects Other general costs Project costs 2012 Budgeted project costs 2012 Project costs 2011 Uzbekistan 1,393 1,283 1, ,988 6,284 5,116 Yemen , Zimbabwe 830 2,899 1, ,228 7,349 7,889 Various exploratory projects Reserved in the budget for unplanned emergency aid projects 15,899 30,417 46,666 26,883 6,904 6,830 19,558 2, , , ,379 Other costs and movements in provisions for emergency aid costs Total emergency aid expenditures ,838 46,666 26,884 6,904 6,830 19,640 2, , , ,475 Total emergency aid expenditures ,283 44,793 30,413 6,692 7,035 18,731 2, ,475 15

16 The Strategic Plan established by the Board sets objectives for the type of projects to be carried out. These objectives can be linked to the costs of emergency aid. This page shows three graphics which illustrate the expenditure on emergency aid and the source of financing of the emergency aid. MSF-Holland works primarily in conflict areas. According to the Strategic Plan, at least 30% of its emergency aid should be carried out in conflict areas. In 2012 this was 58% ( %). In addition the graphics indicate which groups of beneficiaries have been reached by MSF-Holland. It is MSF-Holland s aim to fund 15% of the expenditure on emergency aid with grants from institutional donors. In % (2011: 13%) of the emergency aid was funded by institutional donors. Within the expenditure on emergency aid MSF-Holland aims at a share of about 15% to be spent on the costs for medical, logistical and administrative coordination. In 2012 the portion of coordination costs arrived at 16% of the total (2011: 14%). Emergency aid for victims of conflict 16% 2% 14% 3% 33% 29% 18% 21% 27% 2011 Victims of armed conflict Victims of social conflict Victims of endemic and epidemic diseases Victims of natural disasters Medical and logistics coordination of the projects 37% 2012 Emergency aid in conflict areas Emergency aid funding % 15% 39% 37% 24% 29% 4% 43% Armed conflict Internal instability Post-war countries Stable countries 3% 21% Institutional Donors Network MSF 64% Donations and Postcode Lottery 16

17 2.2 Preparation and coordination Explanatory notes 2012 Budget Direct costs note 2.9 1,634 1,202 1,214 Costs personnel head office note 2.9 7,209 7,218 6,846 Attributed overhead costs note 2.9 2,880 3,223 3,123 Total 11,723 11,643 11,183 The increase in the expenditure for preparation and coordination is explained by the increase in the number of FTE s (plus 10) employed in this category. (See note 2.9 c as well) 2.3 Information and awareness-raising Explanatory notes 2012 Budget Direct costs Periodical Hulppost (25%; see also chapter 4, Accounting Principles) Contributions to the international campaign Access to Essential Medicines General communications and information activities 1,049 1, ,654 1,897 1,459 Attributable costs Costs personnel head office note Attributed overhead costs note Total 2,353 2,669 2,133 17

18 2.4 Commissioned to third parties Budget Grant to MSF-Spain: projects in Central African Republic and South Sudan 4,000 4,000 0 Contributions to the international MSF funds for innovative projects, MSF-International Grant to MSF-Belgium: South Sudan, Maban refugees Contribution to Drugs for Neglected Diseases initiative (DNDi) through MSF-International Grant to Amsterdam Institute for Global Health and Development Grant to the Blacksmith Institute to support clean-up of lead contamination in Nigeria Grant to MSF-France for the project related to the 2011 Tsunami in Japan Total commissioned to third parties 4,665 4, Costs own fundraising Explanatory notes 2012 Budget Direct costs Face-to-face fundraising 2,608 2,430 2,164 Telemarketing activities 1,595 1,716 1,055 Periodical Hulppost (75%; see also chapter 4, Accounting Principles) 1,037 1, Direct mail Corporate fundraising Legacies and inheritances Internet fundraising Other and general costs of fundraising ,955 5,934 5,757 Attributable costs Costs personnel head office note Attributed overhead costs note Total 6,806 6,810 6,576 18

19 Fundraising expenses 2012 Costs own fundraising as % of income own fundraising 1% 1% 4% 2% 3% 13% 38% % 10 Face-to-face fundraising 23% 5 Telemarketing activities Periodical Hulppost Direct mail Corporate fundraising Legacies and inheritances Internet fundraising Other Attributable costs As planned in 2012 more was invested in face-to-face fundraising and telemarketing compared to 2011 despite the fact that the fundraising market for these channels remains challenging. The composition of the fundraising expenditure is shown on this page. The composition of the income (see note 2.10 c) is presented in the same categories as the expenditure to allow for a better comparison of costs versus income. In 2012, 13.3 full-time staff members worked on fundraising activities (2011: 12.3 full-time staff). Compared to the previous year, the total fundraising expenditure increased from 15.2% to 15.6% of the funds raised. In the period , the fundraising expenditure averaged 14.5% of the funds raised. This puts MSF-Holland well under the maximum of 25% set by the CBF. MSF-Holland strives to keep the expenditure of its own fundraising under 20% of the income out of own fundraising. The fundraising activities of MSF-Holland are carried out in accordance with the VFI Code of Conduct of 2000 and relevant codes of conduct of other sector organisations. MSF-Holland also has its own code of conduct for fundraising and keeps a complaints register for donors. Both are included in the fundraising policy as endorsed by the Board. 19

20 2.6 Costs third-party appeals Explanatory notes 2012 Budget Communication and facilities costs Tour for Life Joint Information activities in television broadcasts of the National Postcode Lottery Other Attributable costs Costs personnel head office note Attributed overhead costs note Total The costs of communication and facilities for participants and volunteers of the Tour for Life totalled 464,741 in 2012 (2011: 325,281). In cyclists and 323 volunteers and helpers participated in the event. Together they contributed 214,700 (2011: 101,091) of their own funds toward the costs of their travel and accommodation. MSF-Holland paid the remainder of 250,041 (2011: 224,190) to the Emo Foundation as reported here. The net costs were 16.8% (2011: 23.0%) of the income received by MSF-Holland (see note 2.11). In 2012 an average of 1 full time equivalent was allocated to third-party appeals. 2.7 Costs of acquiring grants from institutional donors Explanatory notes 2012 Budget Direct costs note Costs head office personnel note Attributed overhead costs note Total The expenditure of acquiring grants from institutional donors particularly concern the head office costs for submitting requests for a grant and for reports justifying the expenditures. The costs of acquiring government grants are included here when incurred at head office. 20 The costs incurred in project countries are included in the coordination costs of direct aid. The income from institutional donor grants increased by 3.0 million to 20.6 million in 2012.

21 2.8 Costs Management and administration Explanatory notes 2012 Budget Direct costs note 2.9 1,252 1, Contributions to the MSF-International office chapter Costs personnel head office note 2.9 1,936 2,078 1,843 Attributed overhead costs note Total 3,932 3,858 3,516 The costs of management and administration amounted to 2.3% of the total expenditures in 2012 (2011: 2.1%) and are explained in more detail in note 2.9. A table showing the composition of the direct costs of management and administration can be found in chapter 4 Principles. 2.9 Total all costs, specification and division of costs according to type and allocation The overview on the following pages shows a total of all costs. The costs of headquarters personnel and the overhead costs are divided in proportion to the attributed number full-time equivalents (FTE) employed at headquarters during the year. The costs of the overhead are shown in full in the summary of total costs before being allocated to the other cost categories. MSF-Holland wants to show the size and the type of these costs and also indicate the attribution of overhead and management and administration to its main activities. The attribution of costs to the different activities is explained in more detail in chapter 4, Accounting Principles. The total of the costs and the breakdown of the costs is as follows: 21

22 Spent on Association goals Fundraising Management and administration To be attributed Emergency aid Commissioned to third-parties Preparation and coordination Information and awareness raising Own fundraising Fundraising by third parties Acquiring government grants Management and administration Overhead 2012 Total Budget 2012 total 2011 Total Number of full-time equivalents working during the year Direct costs emergency aid 141, , , ,475 Commissioned to third-parties 4, , contributions , ,069 Publicity and communications , ,350 6,522 6,035 Housing costs , Office and general costs ,087 2,967 3,234 3,206 Cost stocks for emergency aid Travel and accommodation costs Advice costs Costs Board and Association Costs MSF-India - branch office Depreciation and interest ,029 4,665 1,634 1,654 5, ,850 2, , , ,003 Costs to be divided for head office personnel Salaries and social security - 5, , ,347 10,249 8,427 Pension contributions ,162 1,144 1,056 Other personnel costs , ,543 Subtotal all costs 141,029 4,665 8,843 2,304 6, ,786 3, , , ,029 Distribution of overhead costs 2, ,148 Total all costs 141,029 4,665 11,723 2,353 6, , , , ,029 22

23 2.9 a Composition of the Expenditures MSF-Holland uses two main indicators to monitor the relationship between different expenditures. Expenditure on operational goals on the one hand (see note 2.9 a), and expenditure on the Amsterdam headquarters on the other hand. The expenditure on headquarters may be a maximum of 20% of the total costs. In 2012 the headquarters costs were 14.9% of the total costs (2011: 14.6%) composition of Expenses in % 2.3% 1.4% 6.8% The following targets have been established for the headquarters expenditures related to the total expenditure: Preparation and coordination 8% of the total expenditure 2012: 6.8% (2011: 6.8%) Fundraising 5% of the total expenditure 2012: 4.4% (2011: 4.4%) Management and administration 3% of the total expenditure 2012: 2.3% (2011: 2.1%) The percentages above are appropriate for the current composition of aid projects and the current size of the organisation. If the character and the complexity of the aid projects change the percentages can be adapted accordingly. The Overhead costs of the Amsterdam headquarters were 3.1 million in 2012 (2011: 3.4 million). Emergency aid Preparation and coordination Awareness raising and communication Fundraising Management and administration overhead 85.1% 23

24 2.9 b Personnel in full-time equivalents Expatriate staff 2012 Budget Emergency aid - expatriate staff Emergency aid - (Amsterdam) office staff seconded to project countries Total FTE employed in project countries Emergency aid - Non allocated FTE (paid in-between-mission leave, sick leave, etc.) Total FTE expatriate staff Amsterdam head office 2012 Budget Preparation and coordination Information and awareness raising Fundraising Third party appeals and Institutional fundraising Management and administration Overhead Total FTE in Amsterdam head office Other personnel data 2012 Budget Emergency Aid - National staff employed in the project countries 7,025 7,000 7,245 Volunteers working at the head office in Amsterdam Number of departures of expatriate staff 996 1,094 1,120 The number of FTE involved in Preparation and coordination as well as Management and administration at head office increased (plus 10 FTE and plus 2 FTE respectively), whilst the number of FTE in the other categories remained about the same. The increase in Preparation and coordination is caused by the increased volume of projects between 2009 and 2011 which requires additional support from headquarters. 24

25 2.9 c Salaries, social security and personnel costs Expatriate staff salaries, social security and pension costs included in the item Medical and logistical staff posted (direct costs Emergency aid, note 2.1) are as follows: 2012 Budget Salaries employees with MSF-Holland contract 9,303,053 8,682,000 9,231,341 Social security costs 368, , ,377 Pension contributions 969, ,000 1,025,577 Costs staff hired from other MSF-sections 9,560,656 9,150,000 9,443,776 Other general costs included in the item Medical and logistical staff posted (direct costs emergency aid, note 2.1) include personnel costs related to housing, international transport, training and preparation for departure and posting. The increase in costs is due to that fact that the average cost per FTE for expatriate staff increased compared to This was a result of an increase in experienced staff (not first mission) both on a MSF-Holland contract and hired from other MSF-Sections. Under the header Costs to be divided for head office personnel the item Salaries and social security of head office personnel exclusively consists of the gross salaries, taxed reimbursement of expenses and associated social security costs, 1,250,299 (2011: 1,070,996). The cost of recruitment of personnel, canteen costs and the costs of temporary and free-lance staff are included in the item Other personnel costs.in 2012 the item Other personnel costs decreased by 39% due to less expenditure for temporary staff and recruitment. The average salary costs (including pension and social security) per FTE increased by 1.8%. In total this resulted in a decrease of the average costs of staff employed at head office by 4% compared to last year. 25

26 2.9 d Auditors costs In 2012 MSF- Holland changed statutory auditors from KPMG to PwC. The following fees were paid to auditors in 2012: Allocated to: 2012 Budget PwC Accountants; audit of the Financial Statements Advice - head office KPMG Accountants; audit of the Financial Statements Advice - head office PwC Accountants; audit contracts institutional donors Audit, advice and project support KPMG Accountants; audit contracts institutional donors Audit, advice and project support Total Auditors costs No special audit costs were incurred in Auditor costs for 2011 concern cost of KPMG. 2.9 e Board costs and expenses paid to Board members The Board of the Association MSF-Holland supervises the organizational policies as carried out by the director who has been appointed by the Board. The Board members receive no remuneration for their supervisory function. The General Assembly is the highest supervisory body of the Association and is held once per year at a minimum. The Board and Association costs shown here concern the costs made by the Board for: 2012 Budget Carrying out supervisory responsibilities Association and General Assembly International representation within the network Médecins Sans Frontières Remuneration president P. de Graaf

27 In addition to his unremunerated supervisory role, the President of the Association Board is a member of the Board of Médecins Sans Frontières International and is chairman of the MSF OCA-Council. These are two governance bodies in the international MSF-network in which MSF-Holland participates and in which MSF-Holland must be well represented (see also chapter 5: Partnerships). For the time spent in fulfilling duties concerned with international governance the president received compensation in the amount of 66,000 (2011: 65,500). The time spent on these specific governance activities is comparable to 0.42 FTE (2011: 0.52 FTE). The remuneration paid is in accordance with the maximum remuneration approved by the General Assembly. In total the president spent at least 1,523 hours (2011: 1,489 hours) on fulfilling his board duties. In 2012 the other Board members did not receive any remuneration from the Association MSF-Holland No loans, advances or guarantees were provided to Board members. As at December 31, 2012, the number of Board members of the Association MSF-Holland comprised: 8 (2011: 8). The minimum number of Board members required according to the statutes of the Association is 7. 27

28 2.9 f Employment and remuneration of the Directors MSF-Holland has a titular director. In 2012 this position was occupied by Mr. A. Hehenkamp. In FTE was used for the position of General Director (2011: 1 FTE). The General Director is supported by a Management Team of 4 directors. The position of Delegate Director was added in In 2012 a total of 519,812 was spent on Directors remuneration (see table below) for 4.33 FTE. In 2011 this was 472,725 for 3.7 FTE. Specification employment contract and remuneration of the Directors Management Team A. Hehenkamp M. Langenbach F. van Spengler L. Shanks K. Coppens Function General Director Director Operations Director Resources Medical Director Delegate Director Employment details Type of contract indefinite indefinite definite indefinite indefinite Hours Labour percentage 100% 100% 100% 100% 100% Employment period in /01-31/12 01/01-31/12 01/01-31/12 01/01-31/12 01/09-31/12 Remuneration Gross per year excluding holiday allowance 100,764 98,064 86,316 71,428 24,616 Holiday allowance 8,061 7,845 6,905 3,810 1,969 Other taxable allowances Variable income Subtotal (salary according to advisory scheme) 108, ,909 93,221 75,238 26,585 Other costs Pension contributions 17,849 22,936 18,916 8,655 4,767 Social security costs (including health insurance contribution) 8,518 8,518 8,518 8,518 2,839 Taxable disbursements Other (future) benefits Severance pay Total salary costs directors , , ,655 92,411 34,191 28

29 MSF-Holland applies the Guideline Advisory Scheme for the Remuneration of Directors of charity organisations as established by the VFI. This binding advice was revised in In the scheme the weight of the Director s function is measured on the basis of three criteria: size, complexity and organizational context. MSF-Holland arrives at a total of 570 points. In the management model applied to MSF-Holland, the General Director is measured at 92% (524 points), while each member of the Management Team measures 80% (456 points). Based on this scheme, MSF-Holland has classified the directors functions respectively to grade J and I, or 140,046 and 124,233 (salary table 2010). According to the scheme, pension and employer s costs are not included in these salary figures. The salary structure of MSF-Holland results in salaries under the maximum allowable in the VFI scheme. MSF-Holland policy applying to all directors positions is that the director is appointed to his or her position for a period of maximum three years, with the possibility of two years extension. Expatriate tax regulations have been applied to the salary of the Medical Director. No loans, advances or guarantees were provided to any of the directors. The Delegate Director, Ms. Katrien Coppens, is a board member of MSF-Hong Kong Limited and the executive director of the MSF-Holland India Trust, New Delhi, India. The MSF-Holland India Trust is the entity that administers the implementation of MSF-Holland projects in India. Both occupations were for the full year 2012 and both were not remunerated. 29

30 2.10 Income from own fundraising Explanatory notes 2012 Budget Donations from telemarketing 12,327 11,817 11,388 Donations from mailings, including Hulppost 10,409 11,595 10,955 Inheritances 9,602 9,000 10,856 Donations from face-to-face fundraising 5,055 5,319 4,741 Donations from corporate fundraising 2,487 3,289 2,058 Other donations received 1,934 1,104 1,896 Internet donations 1,018 1, Grants from private organisations and provincial governments note 2.10 b Contributions from Association members Total 43,733 43,679 43,165 The income from inheritances as stated in 2012 is affected by the change in accounting principles on the valuation of inheritances (see chapter 1) that is applied starting Would the accounting principles of 2011 have been applied, the income in 2012 would have been 1,551 thousand higher. Comparative figures for 2011 have not been changed here a Earmarked income from own fundraising (see also note 3.9d ; the appropriated fund) Receipts in 2012 Expenditures in 2012 Not spend in 2012 Donations and gifts for Somalia Donations and gifts for South Sudan 1,116-1,116 0 Donations and gifts for various countries Grants from private organisations for various countries Balance as at 31 December to allocation funds 2,076-2,

31 2.10 b Grants from private organisations Allocation C&A Foundation Pakistan floods C&A Foundation Nigeria Goronyo Adessium Foundation Somalia Medicor Foundation Ethiopia Income 2012 in Euro thousands 31

32 2.10 c Composition of income from own fundraising Income from own fundraising in 2012 Income and costs from own fundraising 6% 4% 2% 2% 0% 28% % % 24% Donations from telemarketing Donations from mailings, including Hulppost Inheritances Donations from face-to-face fundraising Donations from corporate fundraising Other donations received Internet donations Grants from private organisations and provincial government Contributions from Association members Income own fundraising Costs own fundraising The income from own fundraising increased according to plan by 0.6 million from 43.1 million in 2011 to 43.7 million in In these Financial Statements the composition of the income is presented in the same categories as the expenses to allow for a better comparison of costs versus income. See also note 2.5 above. 32

33 2.11 Income from third-party appeals 2012 Budget Proceeds National Postcode Lottery, regular draw 13,500 13,500 13,500 Proceeds Tour for Life received from Emo Foundation 1,489 1, ,989 14,616 14,475 In 2012 MSF-Holland received a contribution of 13.5 million from the regular draw of the National Postcode Lottery. This is the maximum possible annual contribution to MSF-Holland according to the contract. In 2009 MSF-Holland entered into a contract with the Emo Foundation for the organization of the cycling event Tour for Life. In 2012 the Tour for Life was held for the fourth time and MSF-Holland received the amount of 1,489,265 from the Emo Foundation for the event. 33

34 2.12 Grants from within the MSF-network Grants from within the MSF-network 2012 Budget MSF-Germany 33,450 30,800 40,037 MSF-United Kingdom 15,029 14,923 13,762 MSF-Canada 13,118 12,109 12,949 MSF-USA 12,213 11,300 9,232 MSF-Hong Kong 5,532 5,000 6,238 MSF-Austria 5,301 3,600 3,502 MSF-Sweden 5,092 5,160 5,841 MSF-International MSF-Norway MSF-Denmark MSF-Ireland MSF-France MSF-Belgium MSF-Italy MSF-Luxembourg Total grants from the MSF-network 91,290 83,392 94,192 The income from grants from within the MSF-network ended somewhat lower as in 2011, although a much bigger decrease was expected. The increase from Canada, Hong Kong and USA can be explained by exchange rate differences between moment of budgeting and moment of receipt of the grant. The grants from Austria and Germany were higher than expected due to higher private income from own fundraising in these countries. 34

35 2.13 Grants from institutional donors Grants from institutional donors came from: 2012 Budget European Union (ECHO and EU) 8,881 8,321 5,896 Swedish government (Sida) 3,138 2,570 3,291 Canadian government (CIDA) 2,434 3,601 1,286 Global Fund (GFATM) 1,949 3,703 2,710 Norwegian government (NORAD, NRMFA) 1,765 3, German government (AA) ,200 Danish government (DANIDA) 556 1, Irish government (Irish Aid) Swiss government (SDC) Czech Republic government (Czech MFA) Other institutional donors United Nations (UNAIDS, UNHCR, UNICEF) Total 20,562 24,775 17,610 The project grants refer to the portion of the grants awarded that concern activities carried out in the financial year Other income 2012 Budget Income from interest 1,584 1,000 1,553 Total 1,584 1,000 1,553 In 2012 the average balance on the deposit accounts was slightly higher than in The interest rates decreased during the year leading to almost similar amounts of interest received in 2011 and The development of the amount of interest received over the past 5 years is shown in note

36 2.15 Exchange results from transactions in non-euro currency 2012 Budget Realised exchange results from transactions in non-euro currencies Unrealised exchange results from transactions in non-euro currencies Total The unrealised exchange results concern the value dating of the foreign currency bank balances, the contract obligations and still to be received monies from institutional donors and MSF-sections. Realised exchange results arise in the year of purchasing the goods for projects and from receivables from grant contracts. In 2012 primarily positive exchange rate results were realized on donor contracts stated in the American Dollar and other non-euro currencies. In 2012 MSF-Holland did not make use of financial instruments to control currency risk on various foreign currencies. The exchange results over a period of five years compare as follows: Realised exchange results from transactions in non-euro currencies Unrealised exchange results from transactions in non-euro currencies Total exchange rate result from transactions during the year , Donations in kind Besides receiving financial support, MSF-Holland also receives donations in kind. In addition, MSF-Holland enters into contracts which do not involve payment but goods in kind. In particular, these donations in kind concern the delivery of medicines and food and are accepted in project countries to support MSF-Holland s nutrition and health programmes. These donations in kind are not registered in the bookkeeping and are also not reflected in the results. For internal purposes, MSF-Holland has registered the exchange of materials within the MSF-network, but this is not included in this explanatory disclosure. MSF-Holland registers the use of goods made available by third parties if these are of vital importance in executing aid projects and if these would be purchased if they were not made available to the organisation. The total value of these goods received was 1,983,429 in 2012 (2011 approximately 1.7 million). 36

37 Donations in kind per donor and per category Medicines Medical material Laboratory Medical kit Therapeutic food Non therapeutic food Relief items / Other Total 2012 Brian Bell Lae Consultative Implementation & Monitoring Council (CIMC) ,863 56,863 Medical Action Myanmar (MAM) Ministries of Health 1,035,860 3,766 8, ,047,895 National Aids Program Myanmar (NAP) National TB Program Myanmar (NTP) 60, ,881 United Nations (UNFPA) United Nations (UNICEF) 3,263 6, , , ,661 United Nations (WFP) , ,560 United Nations (WHO) 1, , ,232 Total 1,103,026 11,525 8,269 3, , ,560 62,050 1,983,429 Donations in kind per country Central African Republic 16,214 Chad 224,712 DR Congo 9,185 Myanmar 623,636 Papua New Guinea 57,692 South Sudan 12,054 Swaziland 257,602 Uzbekistan Zimbabwe 339,973 MSF-Holland head office also receives donations in kind for its activities. Primarily, these concern advertisements in the media and on websites and all sorts of advisory services. In 2012 MSF-Holland received pro-bono support and advice on management and organizational issues by Bain & Company NL (organization, KPI) and IG&H Consulting (communication and fundraising strategy). Total 1,983,429 37

38 38

39 3 Explanation of the Balance Sheet 3.1 Tangible fixed assets 3.1 a Operating assets Leasehold improvements Inventory Hardware/software Total Purchase value Balance as at 1 January ,691 2,365 Purchases Disinvestments Balance as at 31 December ,417 3,091 Depreciation Balance as at 1 January ,167 1,841 Depreciation Disinvestments Balance as at 31 December ,336 2,010 Balance sheet value as at 31 December ,081 1,081 The purchase of hardware/software concerns investment in a new server and expansion of the network hardware in the Amsterdam office, and the development of logistical and financial software as part of an international MSF project. The software is for use in the emergency aid projects and will be deployed in the course of No depreciation of this software has been booked in 2011 and 2012 since the development is still ongoing. 39