Secretariat of the Convention on Wetlands of International Importance (Ramsar) Gland Report of the auditor on the financial statements 216
Report of the auditor to the Standing Committee of Secretariat of the Convention on Wetlands of International Importance (Ramsar) Gland Report of the auditor on the financial statements On your instructions, we have audited the accompanying financial statements of Secretariat of the Convention on Wetlands of International Importance (Ramsar), which comprise the balance sheet, statement of income and expenditure, cash flow statement and notes, for the year ended 31 December 216. Management s responsibility Management is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law. 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. Management 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 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. 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. Opinion In our opinion, the financial statements for the year ended 31 December 216 comply with Swiss law. PricewaterhouseCoopers SA, avenue C.F. Ramuz 45, case postale, CH11 Lausanne, Switzerland Téléphone: +41 58 792 81, Téléfax: +41 58 792 81 1, www.pwc.ch PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.
Other matters The Appendix A as of 31 December 216 and for the year then ended, is presented for the purpose of additional analysis and is not a required part of the financial statements. The information included in Appendix A is the responsibility of the Ramsar s management. The information in Appendix A has not been subject to audit procedures; accordingly, we neither express any assurance nor issue an audit opinion on the information included in Appendix A. Our opinion is not qualified in respect of these matters. PricewaterhouseCoopers SA Yves Cerutti Audit expert Auditor in charge Claude Attard Bezzina Geneva, 28 July 217 Enclosure: Financial statements (balance sheet, statement of income and expenditure, cash flow statement and notes) Appendix A 3
TABLE OF CONTENTS Page BALANCE SHEET 4 STATEMENT OF INCOME AND EXPENDITURE 5 CASH FLOW STATEMENT 6 NOTES TO THE FINANCIAL STATEMENTS 1. 2. 3. 4. 5. 6. 7. 8. 9. 1. 11. 12. Activity Summary of Significant Accounting Policies and Definitions Staff Costs Financial Income / (Expense) Provisions for Staff Termination, Leave and Repatriation Contracting Party Receivables (Net) Other Receivables Other Payables NonCurrent Assets (Net) Swiss Government Tax Rebate Unrestricted Reserve Fund Projects Financed by Restricted Funds Appendix A 7 8 11 11 11 12 12 12 12 13 13 13 14
SECRETARIAT OF THE CONVENTION ON WETLANDS OF INTERNATIONAL IMPORTANCE ESPECIALLY AS WATERFOWL HABITAT (RAMSAR, IRAN, 1971) BALANCE SHEET AS OF 31 DECEMBER Notes in thousands of Swiss Francs (CHF 's) ASSETS Current assets Cash and short term bank deposits 216 4,599 215 4,652 Contracting Party receivables (net) 6 624 658 Other account receivables 7 98 88 Total current assets 5,321 5,398 Total noncurrent assets 9 21 34 TOTAL ASSETS 5,342 5,432 LIABILITIES AND FUND BALANCES Current liabilities Amount owe to IUCN 277 775 Other Payables 8 766 63 Accrued liabilities 111 293 Total current liabilities 1,154 1,698 Provisions Staff repatriation 5 12 124 Staff leave 5 1 165 Staff termination 5 89 227 Total provisions 39 516 Fund and Reserves Unrestricted reserve fund 11 1,27 372 Restricted Projects 12 2,69 2,846 Total fund and reserves 3,879 3,218 TOTAL LIABILITIES AND FUND BALANCES 5,342 5,432 4
SECRETARIAT OF THE CONVENTION ON WETLANDS OF INTERNATIONAL IMPORTANCE ESPECIALLY AS WATERFOWL HABITAT (RAMSAR, IRAN, 1971) STATEMENT OF INCOME AND EXPENDITURE for the year ended 31 December 216 215 in thousands of Swiss Francs (CHF 's) Notes Core Funds Restricted Projects Total Core Funds Restricted Projects Total Income External income: Contributions from Contracting Parties 3,779 3,779 3,779 3,779 US voluntary contributions 1,66 76 1,142 1,66 84 1,15 African voluntary contributions 14 14 1 8 9 Project income 625 625 1,125 1,125 Swiss tax rebates 1 172 172 222 222 Total external income 5,17 716 5,733 5,68 1,217 6,285 Transfer between core and projects (277) 277 (287) 287 Total Income 4,74 993 5,733 4,781 1,54 6,285 Expenditure Operating expenditure: Communications (Outreach) (46) (184) (644) (59) (443) (1,34) Regional Advice, Initiatives and Support (1,242) (418) (1,66) (1,23) (324) (1,554) Scientific and Technical Services (146) (1) (156) (158) (15) (173) Partnerships (432) (432) (251) (526) (777) Management, Operations and Support (2,164) (7) (2,234) (2,426) (1,484) (3,91) Total operating expenditure (4,11) (1,115) (5,126) (4,655) (2,793) (7,448) Net Surplus/(Deficit) before Financial Income/Expenditures 729 (122) 67 126 (1,289) (1,163) Other income (expenditures): Financial income 4 127 7 135 74 14 88 Financial expenses 4 4 (122) (119) (329) (1) (339) Provisions and writeoffs (expense) 37 37 (28) (28) Total other income/expenditures 169 (115) 54 (463) 4 (459) Net Surplus/(Deficit) after Financial Income/Expenditures 898 (237) 661 (337) (1,285) (1,622) STATEMENT OF FUND BALANCE for the year ended 31 December in thousands of Swiss Francs (CHF 's) Core Funds Preliminary 216 215 Restricted Projects Total Core Funds Restricted Projects Total Fund balance at the beginning of the year 372 2,846 3,218 79 4,131 4,84 Net income / (expenditure) for the year 11 898 (237) 661 (337) (1,285) (1,622) Transfer (from) to reserve fund Fund balance at the end of the year 1,27 2,69 3,879 372 2,846 3,218 5
SECRETARIAT OF THE CONVENTION ON WETLANDS OF INTERNATIONAL IMPORTANCE ESPECIALLY AS WATERFOWL HABITAT (RAMSAR, IRAN, 1971) Cash Flow Statement for the year ended 31 December 216 in thousands of Swiss Francs (CHF 's) 216 215 Cash flow from operations Surplus/(Deficit) from Operations 661 (1,622) Depreciation of fixed assets 15 17 Increase / (decrease) in provisions for membership dues in arrears (37) 28 Increase / (decrease) in staff leave and repatriation liabilities (69) 38 Increase / (decrease) in the provision for staff termination (138) 99 (Increase) / decrease in membership dues receivables (gross) 72 (46) Increase / (decrease) in payables to partner organisations (498) 261 (Increase) / decrease in other accounts receivable (1) (81) Increase / (decrease) in membership dues paid in advance (52) (146) Increase / (decrease) in accounts payable and accrued liabilities 15 (194) Increase / (decrease) in social charges payable (9) 45 Total Cash flow from operations (51) (1,781) Cash flow from investing activities Purchase of fixed assets (2) (1) Total Cash flow from investing activities (2) (1) Net Cash inflow/(outflow) for the year (53) (1,791) Cash and short term deposits at the beginning of the year 4,652 6,443 Cash and short term deposits at the end of the year 4,599 4,652 6
SECRETARIAT OF THE CONVENTION ON WETLANDS OF INTERNATIONAL IMPORTANCE ESPECIALLY AS WATERFOWL HABITAT (RAMSAR, IRAN, 1971) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 216 1. ACTIVITY The Convention on Wetlands of International Importance especially as waterfowl habitat, signed in Ramsar, Iran, in 1971, is an intergovernmental treaty which provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources. The Convention's mission is the Conservation and wise use of all wetlands through local, regional and national actions and international cooperation, as a contribution towards achieving sustainable development throughout the world". Under the treaty, the Contracting Parties agree, inter alia to: promote the conservation and wise use of wetlands through international cooperation implement the conservation and wise use of wetlands within their territory encourage research and exchange of data regarding wetlands endeavour to establish and manage reserves for wetlands and to increase waterfowl populations on wetlands promote training of competent personnel in the field of wetlands research, management and wardening. The Convention s Secretariat, which is not a separate legal entity, is constituted under Article 8 of the Convention and administered as an independent unit by and from the offices of IUCN, International Union for Conservation of Nature and Natural Resources, Gland, Switzerland. The Secretariat s functions include the provision of administrative, technical and scientific support to the Contracting Parties, maintaining a List of Wetlands of International Importance and notifying Contracting Parties of additions to that List. 7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND DEFINITIONS i. Accounting principles applied in the preparation of the financial statements These financial statements have been prepared in accordance with the provisions of commercial accounting as set out in the Swiss Code of Obligations (Art. 957 to 963b CO, effective since 1 January 213). Significant items are accounted for as follows: ii. Currency All figures are in thousands of Swiss francs (CHF) unless otherwise indicated. iii. Contributions from Contracting Parties Contributions from Contracting Parties are determined in accordance with the UN Scale of assessments for contributions of Member States to the United Nations budget approved by the UN General Assembly. These are then attributed to the Ramsar budget. Contributions are accounted for on an accruals basis. iv. Voluntary contributions and other income Any voluntary contributions and receipts of other income are accounted for on a cash basis, when they are received by Ramsar. v. Expenditure Expenditure is accounted for on an accruals basis. vi. Accrued Liabilities Accrued liabilities are calculated using time based method. vii. Unrestricted Funds Unrestricted funds are funds that are not subject to any externally imposed restrictions on their use. The Secretary General is empowered by the Standing Committee of the Convention to determine how these funds are applied. viii. Restricted Funds Restricted funds are those funds provided by donors with restrictions applying to specific projects, geographical regions, specific activities or other externally imposed restrictions as to their use. These funds are applied only in accordance with the donor agreements. 8
ix. Foreign Exchange The Secretariat s accounting records are maintained in Swiss Francs which is the reporting currency. Except for fixed assets which are stated at historical values, all assets and liabilities expressed in other currencies are translated at exchange rates ruling at the end of the year. Items of income and expenditure in other currencies are included in the financial statements at the exchange rate prevailing at the date of the transaction. Bank accounts expressed in US dollars (USD) and Euros (EUR) or other currencies are revalued to Swiss Francs at the yearend rate of exchange. x. Yearend Exchange Rates The following are the principal rates of exchange to the Swiss Franc used to revalue the balance sheet accounts at the end of the year. 31 December 215 31 December 216 USD EURO NOK xi. 1.252 1.718.118.998 1.826.1132 Provisions against dues receivables from contracting parties The management of Ramsar applies a method of provisioning against outstanding dues from contracting parties by applying the following percentages to the total outstanding balance for each Contracting Party based on the age of their oldest outstanding balance: xii. Outstanding dues from contracting parties for 6 or more years Outstanding dues from contracting parties for 5 years Outstanding dues from contracting parties for 4 years Outstanding dues from contracting parties for 3 years Outstanding dues from contracting parties for 2 years The rest of outstanding dues from contracting parties 1% 8% 6% 4% 2% 5% Fixed assets Fixed asset purchases are capitalized when the purchase price is CHF 1, and above (or the equivalent in other currencies) and when ownership resides with Ramsar. Fixed assets are depreciated over their estimated useful lives on the following basis: Office furniture Office equipment Computer hardware/software 7 years 5 years 3 years 9
xiii. Core Reserve Fund The Core Reserve Fund receives annual surpluses/(deficits) from core operations which are accumulated and held to meet unforeseen and unavoidable expenses. Resolution XI.2 of COP11 stipulates that the Reserve Fund should not be less than 6% of the annual core budget of the Convention and not greater than 15%. xiv. Statement of Income and Expenditure Following the decision of SC5122, the Statement of Income and Expenditure for years ended 216 and 215 are presented by function of expense. A brief explanation of each function is as follows: xv. Communications (Outreach) manages the communications functions of the Secretariat (publications, workshops, translations and websites); Regional Advice, Initiatives and Support provide the support to the Contracting Parties in their implementation of the Convention such as advice on the wise use of the wetlands in the territory and the designation and conservation of Ramsar Sites; Scientific and Technical Services provides support to the Scientific and Technical Review Panel (a subsidiary body of the Convention responsible for providing scientific and Technical advice to other Convention bodies, such as the Conference of the Parties, the Standing Committee, and the Ramsar Secretariat); Partnerships manage relationships between public and private partnerships; and Management, Operations and Support are the management and administration functions of the Secretariat. Comparability The 216 presentation is consistent with the new financial statements presentation introduced in 215 and the new Swiss Law on accounting (as per Ramsar Standing Committee decision SC5122). xvi. Fulltime equivalents The number of fulltime equivalents, averaged over the year, did not exceed 5 (art. 959c para. 2; 215: same). 1
3. STAFF COSTS Staff costs include salary, recruitment and allowances (education and housing). in thousands of Swiss Francs 216 215 Communications (Outreach) 454 633 Regional Advice, Initiatives and Support 1,16 1,147 Scientific and Technical Services 19 17 Partnerships 64 327 Management, Operations and Support 1,239 1,43 Total 3,26 3,617 4. FINANCIAL INCOME / (EXPENSE) During the year, there was a net exchange gain of CHF 16k (including Interest/Other gain of CHF 2k) compared to a net exchange loss of CHF 251k (including Interest/Other gain of CHF 7k) in 215. Exchange gains and losses directly attributable to projects are dealt with under the respective projects. 5. PROVISIONS FOR STAFF TERMINATION, LEAVE AND REPATRIATION Provisions for staff termination are amounts set aside to cover the Ramsar Convention in case of unplanned termination of indefinite staff contracts leading either to legal costs or redundancy payments or other costs not otherwise budgeted for. Management recommends a target of 1% of annual salary. The provision for staff leave covers the estimated cost of accrued, unused staff vacation which will be taken or paid after 31 December 216. The provision for staff repatriation covers the estimated cost of repatriation of all internationally recruited staff currently on the payroll plus eligible former staff who left the Ramsar Convention within the past twelve months. in thousands of Swiss Francs 216 215 Provisions for staff repatriation 121 124 Provisions for staff leave 1 165 Provisions for staff termination 89 227 Total 31 516 11
6. CONTRACTING PARTY RECEIVABLES (NET) in thousands of Swiss Francs Gross membership dues receivable Provision against dues in arrears Net membership dues receivable 216 215 1,277 (653) 624 1,349 (691) 658 Provision against dues in arrears is calculated as per the policy stated under Note 2(xi). 7. OTHER RECEIVABLES in thousands of Swiss Francs Prepayments Staff advances Withholding tax Rent guarantees and sundry receivables Total 216 215 78 9 1 1 98 79 (2) 1 1 88 216 215 473 278 15 766 525 81 24 63 216 215 84 (63) 82 (48) 21 34 8. OTHER PAYABLES in thousands of Swiss Francs Membership prepayments Accounts payable Pension and insurance payables Total 9. NONCURRENT ASSETS (NET) in thousands of Swiss Francs Office Furniture and Computer Equipment at cost Amortisation and impairment on fixed assets Fixed assets (net) 12
1. SWISS GOVERNMENT TAX REBATE NonSwiss staffs are exempt from paying taxes on their IUCN earnings on the basis of a Fiscal Agreement between IUCN and the Swiss Government, which entered into effect on 1st January 1987. In order to ensure equitable treatment of both Swiss and nonswiss staffs, an internal tax is levied on nonswiss staff resident in Switzerland. This is shown as Retained Swiss Income Tax and is classified as unrestricted income. 11. UNRESTRICTED RESERVE FUND (CORE FUND) The movement in the Core reserve fund is broken down to show (i) the replenishment of the Core reserve fund to the maximum 15% of the annual Core budget (CHF 762k) per Note 2(xiii) plus (ii) the remaining 216 surplus to be allocated based on decisions taken at the 217 Standing Committee meeting (SC53): in thousands of Swiss Francs 216 215 Opening balance 372 79 Replenishment of the Core reserve fund: Correction of prior year foreign exchange loss 117 Use of Core budget to replenish reserve 273 Subtotal replenishment of the Core reserve fund 39 Remaining Surplus / (Deficit) for the year 58 (337) Subtotal Core reserve movement for the year 898 (337) Transfer of surplus (deficit) reserve to Restricted Funds Closing balance 1,27 372 12. PROJECTS FINANCED BY RESTRICTED FUNDS An analysis of projects financed by restricted funds is provided in Appendix A (Unaudited). 13
Appendix A: PROJECTS FINANCED BY RESTRICTED FUNDS For the period of 1 January 216 to 31 December 216 (CHF s, includes rounding errors) in thousands of Swiss Francs (CHF 's) Balance (deficit) at 31 December 215 Income during 216 Expenditure during 216 Project Transfers and Cross charges Balance (deficit) at 31 December 216 (DR)/CR (DR)/CR (DR)/CR (DR)/CR (DR)/CR International Cooperation R1159 R116 R1161 R1163 R1263 R1266 R135 R1356 R1362 R1363 R1364 R1365 R147 R148 R189 R1814 R1819 SGF29 SGF 21 SGF211 SGF213 SGA213 SGA216 WFFExchange WFF26 WFF212 WFF213 WFF214 WFF 215 & 216 RI Central Asia (Norway) Nagao Wetland Fund (NEF Japan) Danone Ecole de l'eau Danone 214 Danone Spring Total of International Cooperation 6 53 39 28 17 87 128 (17) 97 84 9 21 3 1 12 76 92 (16) (28) (68) (85) () (23) (6) () (17) 6 53 23 52 3 () 15 (17) 97 16 3 91 21 3 1 647 289 (227) (17) 692 Listed Sites R111 RAM Total of Listed Sites 6 47 (18) 9 6 47 (18) 9 625 12 53 1 33 18 18 59 6 11 16 197 (1) 2 3 4 (7) 7 128 (28) 6 (5) 11 113 39 26 57 453 7 6 11 5 (8) 3 271 6 125 122 (123) (61) (2) () 14 (14) (1) (1) (88) (3) (1) (7) (16) (152) (1) (2) (398) (129) (3) 112 47 7 (32) 4 1 (7) (4) 3 4 (5) (24) (19) 24 865 36 62 7 33 18 45 11 16 (1) 11 (1) 2 3 1 (1) 2 (6) 114 11 113 3 39 21 13 42 65 (3) 24 2,16 373 (94) 173 1,659 49 26 9 27 8 3 3 14 (3) (1) (8) (3) (3) (18) (18) () 1 3 3 3 3 49 (4) (1) 27 3 12 3 12 14 123 14 (89) 121 169 2,846 723 (1,237) 277 2,69 Other R11 R112 R113 R114 R115 R116 R117 R118 R119 R119 R121 R131 R1311 R142 R143 R144 R145 R146 R1622 R163 R1631 R1815 R1816 R192 R193 R194 R191 R11 R111 R112 R113 R114 R115 Admin RSIS redevelopment Web redevelopment Development Science Review Strategic Plan 216 SC48 translation/interpretation COP12 Translation (FOENCH) SC51 Water cycle WA Urbanisation Americas Admin Rio Cruces Bhutan AIT/JAPAN/MYANMAR KOREA/WETLAND CENTRES RI Central Asia (Japan) WWF Grant, WWD Korea COP11 RM Africa COP12 Admin budget COP Delegate Support Danone 215 Danone 216 STRP 29211 STRP 213215 STRP 216218 TEEB SSFA, Expert Group on Water Cycle WCMC, Online National Report Format NORAD 215 MAVA 1332 UNEP, Law and Environment Outlook Wetlands Extent Trends (WET) Index Total of Other Regional Initiatives R1132 R1133 R1135 R1137 R1138 R1139 R1141 R1142 R1143 R1144 R1145 R12 RI WACOWET RI CARIWET RI Mangrove RI East Africa Centre RI Niger River Basin Network RI Carpathian Wetlands Initiative RI Black and Azov Sea Coast RI Amazon River Basin RI Central Asia RI IndoBurma RI Senegal River Basin AVC, African Regional Initiatives Total of Regional Initiatives Grand Total 14
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