ANNUAL REPORT 2016
Annual Report 2
FOUNDATION BASICS Purpose of the Foundation The purpose of the Suleyman Kerimov Foundation is worldwide charity to people and communities suffering hardship and distress. To realize its purpose, the Foundation provides aid to the needy and the sick, educates and supports young people, develops social infrastructures, promotes religious freedom and supports art, culture and research. Strategy of the Foundation The Foundation supports projects particularly in Russia but also worthy projects in other parts of the world. The Foundation works with partners such as non profit organizations, government agencies and private sector organizations that are experts in their field and are responsible for implementing the projects. In line with its stated purpose, the Suleyman Kerimov Foundation has identified ten core areas to which funding are channeled: Learning and Education Sports Culture Economic Development Medicine Infrastructure Ecology Religion Social Aspects Research Governing Bodies of the Foundation Board of Directors: Mr. Alexander Studhalter, President of the Foundation Dr. iur. Philipp Studhalter, Member of the Foundation Board Mrs. Albina Studhalter, Member of the Foundation Board Terms of Office for the Board of Directors: On going Auditor and Supervisory Authority: Appointed auditor for Year 2016: PricewaterhouseCoopers AG, in Lucerne Oversight authority: Swiss Department of Home Affairs/Swiss Federal Supervisory Board for Foundations, Bern (CH) Annual Report 3
2016 SUMMARY 2016 Funding Areas For the year ended December 31, 2016. Amounts in thousands CHF. FUNDING AREAS 2016 Education Culture 605 Medicine 10 Social Sport 110 Infrastructure Freedom of Religion 195 Total 920 2016 Donation Activity Details February 25, 2016 Spoundation Motion Pictures 500 000.00 USD Support for 2016 Zurich Film Festival May 04, 2016 Russia Mufties Council 4 000 000.00 RUB Support for Ramadan Pavilion June 03, 2016 Rutli Stifung Blue Balls Festival 10 000.00 CHF Support of 2016 Blue Balls Festival June 21, 2016 FC Luzern 20 000.00 CHF Support for the women s league July 11, 2016 Regionales Eiszentrum Luzern AG 90 000.00 CHF Support of local ice rink July 11, 2016 Deutsche Klinik Allianz 8 591.41 EUR Support for medical treatment of a private individual October 18, 2016 Lucerne Blues Festival Blues for School 10 000.00 CHF Support for program Blues for Schools November 30, 2016 Spiritual Board of Muslims of Moscow 8 720 000.00 RUB Support for MAVLID an Nabi event December 1, 2016 Luzern Tourism AG 80 000.00 CHF Support for promotion of Luzern as film location Annual Report 4
BALANCE SHEET ASSETS Notes 31.12.2016 31.12.2015 Current assets Cash and marketable securities 4 5'751 2'939 Accounts receivable 5 1'161 3'840 Accrued income 13 1 6'925 6'780 Fixed assets Intangible assets 1 1 1 1 ASSETS 6'926 6'781 LIABILITIES Shortterm liabilities Accounts payable Other liabilities 4 5 Provisions 6 39 Accrued expenses 22 21 26 65 Organisation capital Paidin foundation capital 5'000 5'000 Earned fixed capital Earned free capital 1'900 1'716 6'900 6'716 LIABILITIES 6'926 6'781 The information in the notes is an integral component of the annual financial statements Annual Report 5
INCOME STATEMENT Notes 2016 2015 Income from donations received 7 1'422 33'793 Income from donations 1'422 33'793 Contributions of free donations 8 (920) (32'957) Donation expenses (920) (32'957) Total operating income 502 836 Personnel expenses 9 (270) (277) Rental expenses (42) (35) Fundraising expenses (1) (1) Other operating expenses (60) (70) Operating expenses (373) (383) Operating result 129 453 Financial income 10 60 Financial expenses 10 (5) (261) Financial result 55 (261) Annual result before allocation to organisation capital 184 192 Allocation to organisation capital (184) (192) Annual result The information in the notes is an integral component of the annual financial statements. Annual Report 6
Cash flow statement Notes 2016 2015 Annual result before fund result 184 192 (Consumption) / formation of provisions 6 (39) 1 Decrease / (Increase) in agreed donations 5 2'679 (1'118) Decrease / (Increase) of accrued income (12) (Decrease) in other shortterm liabilities and deferred income (6) Cash flow from operating activities 2'812 (931) (Investments) in intangible assets Cash flow from investment activities Cash flow from financing activities Increase in cash 2'812 (931) Opening balance of cash 1.1. 2016/2015 4 2'939 3'870 Closing balance of liquid funds 31.12.2016/2015 4 5'751 2'939 Change in cash 2'812 (931) The information in the notes is an integral component of the annual financial statements. Annual Report 7
Statement of changes in equity 1 January 2015 Allocations to free capital (annual result) 31 December 2015 Funds from fund capital borrowed capital n/a Fund capital (restricted funds, borrowed capital) Funds from equity financing Paidin capital 5'000 5'000 Revaluation reserves Earned free capital (accumulated) 1'524 192 1'716 Organisation capital 6'524 192 6'716 1 January 2016 Allocations to free capital (annual result) 31 December 2016 Funds from fund capital n/a Fund capital (restricted funds) Funds from equity financing Paidin capital 5'000 5'000 Revaluation reserves Earned free capital (accumulated) 1'716 184 1'900 Organisation capital 6'716 184 6'900 The founding capital of CHF 5,000,000 was paid in by the founder of the foundation on 20.11.2007. The information in the notes is an integral component of the annual financial statements. Annual Report 8
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 1 General remarks The Suleyman Kerimov Foundation is a foundation within the meaning of article 80 ff. (personified, specialpurpose fund) of the Swiss Civil Code based in Lucerne with the purpose of global charity and nonprofit, in particular through assistance provided to people in need or in distress, assistance to needy and sick people as well as through the education and support of young people, the promotion of the arts and culture, research of every kind and support for mediumsized enterprises of any kind and the promotion of social and sports development projects. 2 Accounting principles The accounts of the Suleyman Kerimov Foundation are in accordance with all the rules and regulations of the Accounting and Reporting Recommendations (Swiss GAAP FER, in particular Swiss GAAP FER 21) and give a true and fair view of the Foundation's assets, financial position and results. The firsttime application of Swiss GAAP FER was on 1 January 2011. In principle, the historic cost principle applies for the annual financial statements. This is based on the principle of the individual valuation of assets and liabilities. The main accounting principles are set out below. 3. Valuation principles 3.1 Cash and securities Cash and securities are valued at their nominal value. 3.2 Accounts receivable Accounts receivable are valued at their nominal value less necessary value adjustments. 3.3 Liabilities Liabilities are valued at their nominal value. 3.4 Provisions Provisions are made for legal and constructive obligations where the existence or causation due to an event in the past is likely. The amount of the provision is based on estimates of the Foundation Board and reflects future expenses expected per the balance sheet date. 3.5 Other assets/other short and longterm debt Unless otherwise noted, other assets and other short and longterm debt are shown in the balance sheet at nominal value, less any valuation adjustments required. 3.6 Transactions and financial positions in foreign currencies Transactions in foreign currencies are translated at exchange rates current at the time of the transaction. Exchange gains and losses resulting from transactions denominated in foreign currencies are recorded as income and the monetary assets and liabilities held in foreign currencies at the balance sheet date are translated at the yearend rate. The resulting gains and losses resulting from this translation are incorporated into the operating account. Annual Report 9
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 4. Cash and marketable securities Cash Marketable securities Total 31.12.16 5'751 5'751 31.12.15 2'939 2'939 5. Accounts receivable In respect of third parties In respect of the community In respect of associated companies In respect of related parties/organisations Total receivables, gross Provision for bad debts Total receivables, net 31.12.16 31.12.15 1 1'160 3'840 1'161 3'840 1'161 3'840 Receivables from related parties relate to agreed donations. 6. Provisions General provisions Total 2016 Total 2015 Status on 1.1. 39 39 38 Consumption with neutral impact on income (55) (55) Charged to income 16 16 1 Reversed to income Status on 31.12. 39 of which shortterm 39 of which longterm Annual Report 10
7. Income from donations received Donations and gifts from third parties Donations and gifts from related persons Total income from donations 31.12.16 31.12.15 1'422 33'793 1'422 33'793 8. Contributions of free donations 31.12.16 31.12.15 Donations earmarked for projects Donations for education 955 Donations for culture 605 487 Donations for medicine 10 (136) Donations for social purposes 20 Donations for sport 110 173 Donations for infrastructure 10 Donations for religious projects (mainly constructions) 195 31'448 Total donation expenses 920 32'957 9. Personnel expenses Personnel wage costs Social security expenses Pension costs Other personnel expenses Total 31.12.16 31.12.15 227 232 37 38 6 7 270 277 10. Financial result Capital interest income Foreign exchange differences Other financial income Total financial income Interest expense on borrowings Foreign exchange differences Other financial expenses Total financial expenses Financial result 31.12.16 31.12.15 59 1 60 257 5 4 5 261 55 (261) Annual Report 11
11. Expense for service provision in accordance with Swiss GAAP FER 21 31.12.16 31.12.15 Project expenses Contributions of free donations Total project expenses Personnel expenses Rental expenses Fundraising expenses Other operating expenses Total administrative expenses Total operating expenses 920 32'957 920 32'957 270 277 42 35 1 1 60 70 373 383 1'293 33'340 12. Events after the balancesheet date There are no events after the balance sheet date that could affect the accounts for 2016. 13. Compensation to the Foundation board and transactions with related parties and organizations Analogous to the previous year, no remuneration or compensation was paid to the Foundation board. The Foundation received donations from companies formerly related to the founder in the amount of TCHF 1'422 (2015: TCHF 33,793). 14. Risk assessment The Foundation administration conducted a risk assessment in cooperation with the Foundation board, which identified and valued the various risks that could have an influence on the Foundation's financial result. In addition, appropriate measures were taken to prevent, reduce or avoid the risks identified. The risk assessment was approved by the Foundation board on xx February 2017. 15. Approval of the annual financial statements The Foundation board gave its approval to these annual financial statements at a meeting held on xx May 2017 and released them for submission to the Swiss Federal Supervisory Authority for Foundations, Berne (Eidgenössische Stiftungsaufsicht, Bern). The Foundation board requests the Swiss Federal Supervisory Authority for Foundations, Berne to approve these annual financial statements. Annual Report 12
Report of the statutory auditor to the Foundation Board of Suleyman Kerimov Foundation Luzern Report of the statutory auditor on the financial statements As statutory auditor, we have audited the financial statements of Suleyman Kerimov Foundation, which comprise the balance sheet, income statement, cash flow statement, statement of changes in equity and notes (pages 5 to 12), for the year ended 31 December 2016. As permitted by Swiss GAAP FER 21 the information in the performance report is not required to be subject to audit. Foundation Board s responsibility The Foundation Board is responsible for the preparation of the financial statements in accordance with the requirements of Swiss GAAP FER 21, Swiss law and the foundation s deed and internal regulations. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Foundation Board is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. Opinion In our opinion, the financial statements for the year ended 31 December 2016 give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss GAAP FER 21 and comply with Swiss law and the foundation s deed and internal regulations. Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and independence (article 83b paragraph 3 CC in connection with article 728 CO) and that there are no circumstances incompatible with our independence. In accordance with article 83b paragraph 3 CC in connection with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of financial statements according to the instructions of the Foundation Board. We recommend that the financial statements submitted to you be approved. PricewaterhouseCoopers AG An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control system. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Thomas Illi Audit expert Auditor in charge Luzern, 7 June 2017 Andreas Brun Audit expert PricewaterhouseCoopers AG, Werftestrasse 3, Postfach, CH6002 Luzern, Switzerland Telefon: +41 58 792 62 00, Telefax: +41 58 792 62 10, www.pwc.ch PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.