Médecins du Monde 2016 Financial Report 2016 GB USD.pdfMédecins du Monde 2016 Financial Report 2 A WORD FROM OUR TREASURERS In a context of controlled growth (+5% against +17% between

Médecins du Monde 2016 Financial Report

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A WORD FROM OUR TREASURERS

In a context of controlled growth (+5% against +17% between 2014 and 2015), 2016 was very clearly a year of transition and initiatives. Transition, because we finalised our strategic plan and are currently developing an action plan. These two plans will improve how we target and orient our programmes, to provide us with more room for manoeuvre. Initiatives, because we implemented a multi-annual budget for 2017-2019 to help us contain and anticipate our growth, and we drew up an information systems master plan to improve our operational and financial steering. We ended the financial year with a surplus of $1 221 150, to which – subject to approval by the General Assembly – we will add $172 200 of costs to be allocated to our reserves for associative projects (“Mission France Innovative projects”, “Adaptation of our premises in France"). The final accounting result will thus be $1 393 350. This surplus, for the second year running, is a result of our efforts to implement stricter budget management - a sine qua non condition for ensuring we have the means to satisfy our ambitions and preserve a strong and positive image with our institutional donors.

Key figures for 2016:

1) Income in 2016 reached $102 million, representing growth of 29% since 2014 and 6% against 2015. In other words, income continued to grow, but at a slower rate than in previous years. Expenses are up by 5%, reaching $101 million.

2) The percentage of funds allocated to social programmes was high (83%) in 2016, as we ran

63 international projects in 45 countries, and 66 projects in 34 towns in France. The volume of operations in France remains stable with a strong field presence in terms of programmes, advocacy and communication (Calais, Paris, la Roya and Vintimille; unaccompanied minors programmes in Caen and Nantes, the closure or reorientation of Healthcare, advice and referral clinics, etc.). The development in international operations continues, reflecting the operational dynamism of the Emergency Department and Long-term Units (Iraqi-Syrian crisis, launch of programmes in Nigeria and Yemen, Haiti (hurricane), migrant programmes in Europe, etc.).

3) The distribution of our income is still evenly balanced, with 49% of funds for France and

International operations generated by the generosity of the public, 46% by public-sector grants and the remainder by private-sector grants (4%) and other income (1%). As it is our firm intention to remain independent and free to make our own choices, choose our own causes and speak out as we see fit, we are also pursuing our efforts to diversify our public and private – sector funding sources. Over the last three years, we have succeeded in maintaining our financial independence, with an increase in income of almost 30%.

4) In a complex and competitive humanitarian environment, and despite more than $2.1 million being

raised in 2015 for the Nepal emergency, French fundraising through appeals to the general public was still higher in 2016 (+1% against 2015, i.e. +$0.5 million), reaching $40.1 million.


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5) The MdM network also grew significantly, helping to diversify our sources of funding and playing an active part in the financing of our programmes ($9.7 million in 2016).

Issues and outlook for 2017: Budget construction is first and foremost a political action. To help us rethink our economic framework and apply a more pedagogical approach to our budget construction, one that is for the whole MdM community to understand and assimilate, we put in place a 3-year budget for the period 2017-2019 which will provide us with a prospective medium-term vision. This multi-annual budget reflects our Mission statement and the ambitions and priorities defined in our strategic plan:

• Developing a pro-active private fundraising policy, focusing on the generosity of the public through investment in fundraising in France and within the International Network;

• Setting up a Funding Strategy Unit in 2017 tasked with coordinating and optimising public and private sector fundraising;

• Strengthening our financial solidity and safeguarding our reserves by presenting a balanced budget;

• Controlling growth, with specific attention to: - improving the programming of projects to preserve our reaction capacity and room for manoeuvre;

- containing HQ scope by promoting the decentralisation of operational steering and Regionalisation; • Consolidating the International Network to ensure a better balance between the activities of its

different members and promoting partnerships and alliances.

Conclusion :

Doctors of the World – Médecins du Monde France (MdM-F) is a growing organisation, and our controlled financial management provides us with the resources we need to fight our political battles and pursue our objectives of social change. Our fundraising has increased steadily over recent years thanks to our positive image. This growth is demanding. It requires adaptations and a constant effort to maintain a pragmatic approach to budget management that preserves the fragile balance between the essential consolidation of our organisation and our desire to be flexible, innovative, reactive and to work in close proximity to the field, our partners and civil society. It also raises the issue of our economic model and its corollary, our crucial financial independence – a guarantee of our political independence. Financial independence means the ability to design our programmes with our users, to take action without having to wait for funding, to be in a position to refuse donor funding or interference and to develop innovative programmes.


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CONTENTS

Part 1:

The Statutory Auditor’s Report on Médecins du Monde ’s Annual Accounts for the financial year ended on the 31st of December 20 16

� The Statutory Auditor’s Report � 2016 Balance Sheet � 2016 Income Statement � 2016 Annual Income and Expenditure Statement: funds raised from the

general public

Part 2:

Analysis of the 2016 Accounts

Part 3:

Special Report on Regulated Agreements

Part 4:

2017 Budget


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Part 1

The Statutory Auditor’s Report on Médecins du Monde’s Annual Accounts for

the financial year ended on the 31st of December 2016


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2016 BALANCE SHEET

ASSETS GROSS DEPREC + AMORT

NET 2016 Net 2015 LIABILITIES 2016 2015

FIXED ASSETS EQUITYIntangibles Statutory funds 16 007 16 617

Licenses, patents etc. 1 027 942 733 987 293 955 106 425 Gratuities/Bequests 0 0

Advances and downpayments 0 0 0 0 General intervention reserve 16 393 727 16 633 186

Associative project reserve 348 403

Tangible assets Balance brought forward 0 0

Capital grant 25 982 0

Land 1 266 406 0 1 266 406 1 314 650 Surplus allocated to investments 0 5 172

Buildings 8 113 696 6 043 992 2 069 704 2 234 874 Subtotal 16 784 119 16 654 975

Other fixed assets 10 479 589 9 640 538 839 051 760 884

Fixed assets in progress 0 0 0 338 159 (-) DEFICIT or (+) SURPLUS 1 220 667 288 939

Investments TOTAL I 18 004 786 16 943 915

Other long-term securities 22 010 0 22 010 22 848 PROV. for liabilities and Charges 2 613 961 2 077 632

Loans 693 821 0 693 821 662 400

Other investments 868 162 0 868 162 782 111 DEDICATED FUNDS 983 175 1 423 126

TOTAL I 22 471 626 16 418 518 6 053 108 6 222 352

CURRENT ASSETS CURRENT LIABILITIESBank borrowings (1) 18 749 75 440

Stocks of medicines & med. 353 435 37575 315 860 352 940 Trade notes and accounts payable 3 949 729 3 011 081

Other receivables 29 710 953 118 275 29 592 678 20 897 024 Tax and social liabilities 5 152 816 4 855 276

Securities 2 841 0 2 841 4 741 784 Liabilities to fixed asset suppliers 79 387 76 777

Cash 26 038 727 0 26 038 727 20 871 577 Other liabilities 9 507 005 7 831 829

ADJUSTMENT ACCOUNTS ADJUSTMENT ACCOUNTSPrepaid charges 679 297 0 679 297 901 013 Deferred income 22 372 905 19 622 884

TOTAL II 56 785 255 155 851 56 629 404 47 764 338 TOTAL II 41 080 591 35 473 287

Deferred chargesTOTAL III 0 0 0 0

Translation adjustments Translation adjustmentsTOTAL IV 0 0 0 0 TOTAL III 0 0

TOTAL ASSETS 79 256 881 16 574 369 62 682 512 53 986 690 TOTAL LIABILITIES 62 682 512 55 917 960

- Received commitments, net bequests to be processe d : $ 7 196 291 (1) Including bank overdraft : $ 18 749


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2016 INCOME STATEMENT

Operating income On 31/12/16 On 31/12/15 Extraordinary income On 31/12/16 On 31/12/15

Institutional grants 48 086 462 43 505 001 On management operations 6 478 0Private grants 3 747 545 2 994 194 On capital transactions 12 827 33 476Office grants (from private fundraising) 2 581 448 2 140 412 Reversals of provisions 0 0Office grants (none private fundraising) 369 159 440 186 TOTAL V : Extraordinary income 19 305 33 476Donations in kind 42 592 737 42 104 389Bequests 5 781 918 6 769 758 Extraordinary expenses On 31/12/16 On 31/12/15Corporate fundraising 0 445 185 On management operations 7 824 6 331Subscriptions 50 894 44 200 On capital transactions 75 978 0Children sponsorship 10 265 0 Amortization and depreciation 0 0Events income 29 355 28 020 TOTAL VI : Extraordinary expenses 83 802 6 331Other revenue 243 942 363 368Transfer of operating costs 2 200 273 568 807 3 - Extraordinary items -64 497 27 145TOTAL I : Operating income 105 693 999 99 403 520 (TOT AL V) - (TOTAL VI)

Operating expenses On 31/12/16 On 31/12/15Purchase of raw materials and other supplies 12 156 275 14 396 885Movement in stock of medicines & med. suplplies 3 206 -103 444Other purchases and external charges 33 199 527 32 787 646Taxes, duties & related 3 036 430 2 860 695Salaries & payroll 32 990 058 29 175 482Payroll taxes 8 773 913 7 865 368Depreciation and amortization 0 0On fixed assets 669 099 502 378On deferred charges 0 0Provisions and other allowances/current assets 2 256 139 1 800 447

Grants accorded by the Association 9 851 743 8 912 587

Other expenses 1 283 340 471 177

TOTAL II : Operating expenses 104 219 730 98 669 221

1- Operating Income/Loss 1 474 269 734 300(TOTAL I) - (TOTAL II)

Financial income On 31/12/16 On 31/12/15Income from other investments and loans 0 0Other interest and similar income 91 489 64 329 Benefits in kind 7 577 793 6 723 791Foreign exchange gains 765 982 1 448 323Net income on disposal of investments and loans 4 293 14 741Reversal of provisions 64 290 0TOTAL III : Financial income 926 054 1 527 393

Financial expenses On 31/12/16 On 31/12/15Amortization and depreciation 430 340 96 224Interest and similar expenses 17 112 41Foreign exchange losses 985 880 831 536Net expenses on disposal of securities investment 0 0TOTAL IV : Financial expenses 1 433 332 927 800

2 - Financial income/loss -507 278 599 593(TOTAL III) - (TOTAL IV)

TOTAL VII : Corporate income tax 21 957 23 825

TOTAL VIII : balance carried forward from previous year 1 057 401 252 797

TOTAL IX : Commitments of expenditures to be relise d on earmarked funds

647 518 1 449 239

TOTAL INCOME (I + III + V+ VIII) 107 696 759 101 217 186

TOTAL EXPENSES (II + IV + VI + VII + IX) 106 406 340 101 076 416

(-) DEFICIT or (+) SURPLUS 1 290 420 140 771


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1. KEY EVENTS IN THE FINANCIAL YEAR 2. CHANGES IN PRESENTATION, VALUATION OR ACCOUNTING METHODS

3. ASSOCIATIVE PROJECTS

4. ACCOUNTING RULES AND METHODS

5. TANGIBLE AND INTANGIBLE FIXED ASSETS

4.1 - Fixed assets movements table 4.2 - Depreciation table 4.3 - Net book values table

6. FINANCIAL FIXED ASSETS 7. STOCK

8. STATEMENT OF END-OF-YEAR CLAIMS 9. ACCRUED INCOME 10. LIQUID ASSETS

10.1 Marketable values 10.2 Banks and cash funds

11. PREPAID COSTS 12. ORGANISATION’S OWN FUNDS 13. TABLE OF PROVISIONS 14. EARMARKED FUNDS 15. STATEMENT OF END-OF-YEAR DEBTS 16. TABLE OF LEGACIES AND DONATIONS IN PROGRESS 17. ACCRUED LIABILITIES

18. DEFERRED INCOME 19. OFF-BALANCE-SHEET COMMITMENTS 20. EMPLOYEE STATISTICS 21. OPERATING EXPENSES: DETAILS 22. INCOME AND EXPENDITURE STATEMENT


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These Annual Accounts were approved by the Board of Directors at their meeting of 21th April, 2017.

1. KEY EVENTS IN THE FINANCIAL YEAR

The 2016 financial year was characterized by a surp lus (+$1.3M against +$0.3M in 2015) . The increase of our activities is more moderate than last year increase (+5% against +17% in 2015). The share of expenses dedicated to social programs increased in 2016 up to 82.6% of our expenditures against 81.6% in 2015.

Changes to the range of international programmes in 2016:

� Opened programmes:

- France: Unaccompanied foreign minors in Caen / Migrants Rights and Health Nantes / Health

in rural areas Haute Vallée de l’Aude / Health in fragile urban areas South Lille / Cervical

cancer prevention transversal programme

- Africa: Emergencies Nigeria / DRC youth and HIV / Somalia sexual and reproductive health

- Asia: Nepal Reconstruction

- Europe: Migrants Bulgaria, Serbia and Calabria

� Closed Programmes:

- France: Reception, healthcare and advice centers (RHAC) Angers / RHAC Nantes / RHAC Valenciennes / Homeless Poitiers

- Asia : Health and Environment Philippines / Emergencies Nepal - Africa: Nutrition Burkina Faso Djibo / part of sexual and reproductive health Niger / Children

in the streets DRC / Maternal and child health Madagascar / Liberia / Health system strengthening ICR / Mali

- Middle-East : Jordan

� Opened/closed programmes during the year:

- Boat Italy

2. CHANGES IN PRESENTATION, VALUATION OR ACCOUNTING METHODS

Change to the method of calculating exchange rate f luctuations on revenues linked to funding contracts in foreign currency (items concerned: income from the financial year and deferred

income).

When a funding contract is signed to finance field operations, the contract is recorded under donor receivables on the assets side of the balance sheet and offset on the liabilities side as deferred income, carried over into income as the operation progresses.

Until then, deferred income was considered as debt in euros, whatever the currency of the contract signed with the donor, and annual incomes were evaluated on the basis of the offset in euros of expenses committed in the field.

Consequently, all exchange rate fluctuations during the contract’s lifetime were borne in the financial year in which this contract ended.

From now on, in order to more accurately report on the annual economic outcome of operations financed through funding contracts in foreign currency, annual incomes related to field operations will be posted in the currency of the contract concerned.


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Consequently, exchange rate fluctuations will be recorded as the contract proceeds, where necessary.

As a corollary, deferred income from funding contracts concluded in foreign currency will now be considered as foreign currency debt and a provision for exchange rate fluctuations made at year-end if the exchange rate as at 31/12 of the currency used in the underlying contract calls for this. Overall, the loss or profit generated on the contract will be identical, but it will no longer be apportioned at the end of the project, but as this project goes along.

The impact of this change in calculation method is evaluated at $715 684,53 in supplementary expenses for the financial year 2016.

3. ASSOCIATIVE PROJECTS

The General Assembly of 2015 and of 2016 voted in favour of constituting two reserves for specific associative projects, one for financing innovative projects in France and the other for adapting the premises used in France. In conformity with the French General Chart of Accounts for Associations, the appropriation to reserves of expenses for associative projects must be approved by the General Assembly. Expenses recorded in 2016 against the associative project “Innovative projects – France missions”, included in the surplus of $1 220 667,13, amounted to $170 784,22 overall. The expenses recorded in 2016 against the associative project “Adaptation of premises”, included in the surplus of $1 220 667,13, amounted to $1 601,41 overall If the 2017 General Assembly approves these expenses and their allocation to the "Innovative projects – France missions" and "Adaptation of premises” reserves, the accounting result of the financial year for distribution, restated with the cost of these expenses, will be $1 393 052,76 instead of $1 220 667,13 ($1 220 667,13 + $170 784,22 + $1 601,41).

4. ACCOUNTING RULES AND METHODS The financial year extended over 12 months, from the 1st January to the 31 December 2016. The accounts are drawn up in euros. On the 31 December 2016, the Balance Sheet showed a total of 62 682 511,50 US dollars, while the Income Statement, presented in the form of a table, showed a surplus of 1 220 667,13 US dollars (before cost allocation on the reserve account for associative projects).

4.1. BASIC ACCOUNTING PRINCIPLES

The accounts have been drawn up

- in accordance with basic accounting conventions, and the following principles in particular: � The principle of prudence; � Consistency of accounting methodology from one financial year to the next; � Continuity of operations; � Non-compensation; � Independent financial years.


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- in compliance with the general rules for the drawing up and presentation of annual accounts applicable in France, and in compliance with the following regulations in particular:

� CRC 99-01 regarding the rules and regulations for the drawing up and presentation of annual accounts for French associations, foundations and endowment funds; � ANC 2014-03 of 05 June 2014 regarding the general chart of accounts, modified by regulation ANC 2015-06 on the 23th of November 2015; � CRC 2008-12 regarding the drawing up of the Annual Income and Expenditure Statement for French associations and foundations.

4.2. FIXED ASSETS AND DEPRECIATIONS

The Association’s fixed assets are entered in the accounts at their acquisition cost (purchase price plus incidental costs). They are recorded and valued in accordance with the standards laid down by the regulation regarding assets.

Fixed assets which can be broken down :

The only fixed asset found which could be broken down was the building housing the Association’s Head Office in Paris.

It was broken down as follows:

Fixed assets in progress:

None

Depreciation:

Fixed assets are depreciated using the straight-line method over their useful life. This remained unchanged in relation to the previous financial year, as set out below.

The allowance for depreciation for the financial year is entered in the accounts under the heading ‘Allowances for depreciation: fixed assets’.

NET VALUE On 31 december 2016

DEPRECIATION PERIOD

LAND 1 266 406

BUILDING 1 420 303 20 YEARS

TOTAL 2 686 709


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The basis for an asset’s depreciation is its gross value minus its residual value, which is taken to be the sum (minus anticipated disposal costs) which the Association would obtain if it disposed of the asset on the market at the end of its service life.

The residual value is taken into account whenever the service life of an asset is noticeably shorter than its anticipated physical life.

The Association’s Head Office is a fixed asset which can be broken down. Its service life has been set at 20 years, but its physical life will no doubt be much longer.

On 31/12/2016, the net book value of our Marcadet building was $1 421K for the building itself, and $1 266K for the land, which is not depreciable.

In March 2016, an expert valued the Marcadet building and land at $19 320K.

Since the net book value is clearly lower than the residual value ($1 421K for the building plus $1 266K for the land), no allowance for depreciation has been entered in the accounts since 31/12/2004.

Financial fixed assets:

Long-term securities: these are investment securities held for more than 1 year. On 31/12/2016, these amounted to $22K.

Loans: Médecins du Monde frees itself from the obligation to take part in any building effort by paying its contribution to accredited collecting bodies in the form of interest-free loans, repayable over 20 years. On 31/12/2016, these totalled $694K.

Other financial fixed assets: this heading corresponds to advances, deposits and guarantees paid to third parties in France and abroad. On 31/12/2016, these came to $868K.

Provision for depreciation on fixed assets:

No provision for depreciation on fixed assets was recorded on the 31/12/2016.

4.3. STOCK AND STOCK DEPRECIATION

Stock consists mainly of medical and surgical equipment, medicines, emergency kits, vehicles and communications equipment.

The following methods have been used to calculate depreciation over the financial year :

· Software Straight-line, 1 - 3 years· Software developed by subcontractors Straight-line, 3 years· Building Straight-line, 20 years· Fixtures & fittings Straight-line, 6 years and 10 years· Transportation equipment (Headquarters) Straight-line, 3 years and 4 years· Transportation equipment (Programmes) Straight-line, 2 years and 3 years· IT equipment Straight-line, 3 years· IT equipment (International Programmes) Straight-line, 2 years· Office equipment and furniture Straight-line, 6 years· Medical equipment Straight-line, 6 years· Communications equipment Straight-line, 6 years


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Stock is entered in the accounts at its acquisition cost, and valued using the ‘first in, first out’ (FIFO) costing method.

Depreciation is recorded if the actual value is lower than the entry value at the close of the financial year.

4.4. CLAIMS

These are valued at their nominal value. Depreciation is recorded whenever their balance-sheet value is lower than their nominal value.

Claims in foreign currency are accounted using the InforEuro exchange rate on the month concerned by the claim. The InforEuro exchange rate is set by the European Commission.

Any unrealised losses on the 31st of December, resulting from the difference between the InforEuro exchange rate and the closure rate on the 31/12/2016, trigger the creation of a provision for foreign exchange losses.

4.5. DEBTS

These are valued at their nominal value.

Suppliers’ debts in foreign currency are converted using the InforEuro exchange rate rate on the month concerned by the debt. The InforEuro exchange rate is set by the European Commission.

Any unrealised losses on the 31st of December, resulting from the difference between the InforEuro exchange rate and the closure rate on the 31/12/2016, trigger the creation of a provision for foreign exchange losses.

4.6. CASH INVESTMENTS

Marketable securities are entered in the accounts at their acquisition cost and valued using the FIFO method.

Depreciation is recorded whenever the balance-sheet value is lower than the acquisition cost.

Investments earning interest (term deposits and passbook accounts) are entered in the accounts at their nominal value. Any accrued interest is entered in the accounts.

4.7. BANK ACCOUNTS AND CASH FUNDS IN FOREIGN CURREN CIES

Bank accounts and cash funds in foreign currencies are converted into euros at the rate for the 31 December of each year.

4.8. GRANT FUNDING – INTERNATIONAL PROGRAMMES

a. Once an agreement has been signed with a funding agency (public-sector or private), the total amount of the contractual grant is entered against the account of the third-party funding agency, under the balance-sheet heading ‘Other receivables’.


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b. At the close of the financial year, the Association decides how far the financed project has progressed (by comparing actual expenditure to the expenditure forecast in the funding agreement) and how much of the grant should therefore be recognised in the accounts for that financial year. Any administrative costs covered by the contract are also taken into account.

c. The difference between the total grant funding awarded and the portion recorded as income is shown under deferred income. This represents the share of the grant linked to future financial years.

d. Any agreements signed after the close of the financial year, but used to fund eligible expenditure for that year, are recorded as accrued grants.

Ever since this more accurate accounting method has been applied to the outstanding portions owed by funding agencies, i.e. since the financial year 2012, the Association has not needed to set up earmarked funds to subsidise its international programme operations.

4.9. SUBSIDIES AND INVESTMENT GRANTS – FRENCH PROGR AMMES

Operating subsidies are included under operating income for the financial year during which the Association is notified of the decision authorising the subsidy.

If the subsidies apply in whole or in part to a period prior to the close of the financial year, a pro rata calculation is made, so that the income in question can be allocated to the relevant financial year, and, where necessary, deferred income can be entered in the accounts.

Investment grants allocated to property which can be replaced by the Association are kept with liabilities under the heading ‘Non-recoverable Association funds’.

Investment grants allocated to property which cannot be replaced by the Association are allocated to non-replaceable property and recorded in the investment grants account, then reclaimed on the Income Statement, as the item of property gradually depreciates.

4.10. EARMARKED FUNDS FROM GRANTS, DONATIONS AND LE GACIES

Whenever income raised from French donors, general public and testators and allocated by them to a dedicated purpose, and has not been used for that particular purpose by the end of the financial year, the restricted funds are entered in the accounts under balance-sheet liabilities. They represent the unused part of any restricted grants, donations and legacies, and are allocated via a specific expenditure account entitled ‘Outstanding commitments from earmarked funds’.

Whenever these donations and legacies are used in the course of subsequent financial years, the earmarked funds are recovered using a specific income account entitled ‘Unused, earmarked funds brought forward from previous financial years’.

4.11. ASSOCIATIVE PROJECTS

Reserve for the associative project is established and used as follow: - Associative projects must be compliant to the associative object - Expenditures are clearly identified and not assimilated to usual expenditure

The allocation for an associative project and the expenditure commitments affectation concerning this project must be voted during the General Assembly, as well as the affectation to the general reserve of the unused funds.


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4.12. PROVISIONS FOR LIABILITIES AND CHARGES

Provisions for liabilities and charges are set up on the basis of events which have already occurred or are ongoing at the close of the financial year, and render any such liabilities probable.

On 31/12/2016, this heading included:

- provision for litigation and liabilities (mainly related to life insurance policies, dealings with ombudsmen, agreements with funding agencies, risks concerning our international projects);

- provision for retirement benefits. - provision for unrealised exchange rate losses

Provision for retirement benefits:

The value of retirement benefits for Médecins du Monde’s total workforce (excluding local staff in countries other than France) was calculated.

When calculating total retirement commitments (including social security contributions), the following were taken into account:

- retirement age: 65 years - turnover rate averaged out for the last 4 years - pay increases of 1% per annum - annual discount rate: 1.31% - 2015 life table

4.13. LEGACIES AND OTHER DONATIONS

Moveable and immoveable property originating from legacies or donations and destined to be sold by the Association is recorded in the following way:

On the date a legacy is accepted by the Board of Directors or, in the case of legacies prior to 2006, on the date of their administrative authorisation, the items of property in question are recorded (off balance sheet) at their estimated value, and net of any charges they may have incurred in connection with the estate or its realisation, under ‘Commitments received’.

As money is either received or paid out in connection with the sale of these items of property, the sums in question are either credited to (receipts) or debited from (withdrawals) the balance sheet account ‘Legacies and donations in progress’.

The amount of the corresponding off-balance-sheet commitment is altered to reflect the movements are recorded.

Once the realisation of any moveable and immoveable items of property has been finalised and has taken effect, the income account ‘Legacies and other gratuities’ is credited with the final, exact sale amount, net of any acquisition costs incurred by the property during its transfer, and the account ‘Legacies and donations in progress’ is then adjusted with respect to that legacy or donation.

On 31 December 2016, legacies in progress totalled $3 675 149 and legacies receivable came to $7 196 290.

Temporary, usufructuary donations are recorded as off-balance-sheet commitments to the value of the usufruct and its associated fruits, which are recorded as income for the financial year on the basis of the sums received.


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4.14. BENEFITS IN KIND

The receipts and expenditure relating to Médecins du Monde’s activities over the course of the financial year can be clearly identified thanks to our accounting records and financial statements.

However, our accounts only provide a partial picture of the way we operate. The fact is that as an Association we receive numerous voluntary contributions which are never entered in the accounts.

These voluntary contributions are made of the commitment of hundreds of unpaid men and women, without them we would not be able to run our programs, but they are also made of goods, services put to our disposal freely by companies, associations, foundations or donors.

For example, Médecins du Monde benefits from gifts of equipment, goods or medicines, as well as free communications materials and media.

This kind of non-financial giving appears at the foot of the Income Statement and of the Income and Expenditure Statement, and it is thanks to contributions of this kind that the Association is able to save money and expand its operations still further.

Donations in kind:

The valuation of goods and services in kind is based on official documents, supplied by the donors, certifying the financial value of the goods or services being given to Médecins du Monde. This financial value reflects the cost price of the goods or services in question.

The valuation of services in kind for the year 2016 came to $1 326K, compared with $1 103K for 2015.

Voluntary work in France:

A volunteer is a physical person who works for a not-for-profit organisation without receiving anything whatsoever in return.

Since 2014, the work carried out by French volunteers has been centrally recorded using a data-processing tool.

Thanks to the information gathered, we now know the identity of each of our volunteers, the kind of work he/she does and the number of hours worked. Assessing the value of voluntary work involves calculating how much those hours would have cost if they had been worked as paid employment. The reference grid used to calculate their value in monetary terms is Médecins du Monde’s pay scale.

The cost of employer contributions is included in this calculation.

In the course of the financial year 2016, the French volunteers entered on the system worked 240 772 hours, and would have cost us approximately $5 841K.

This valuation is not an accurate reflection of all the work done by volunteers in the course of an entire year, since it is based on individual volunteers’ declarations of the hours they have spent working for the Association. Inevitably, this method of record-keeping fails to pick up every last detail and therefore ends up underestimating the true picture.

International voluntary work:

An international voluntary worker is a physical person over the age of eighteen who fulfils the following 3 conditions:


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1) Signs a voluntary service contract with a French voluntary organisation promoting international

solidarity and recognised by the French Ministry of Foreign Affairs or Ministry for Overseas

Development.

2) Under this remit, takes part in an operation promoting international solidarity.

3) Completes one or more missions of general public interest in a country not on a list determined by

French government decree (Decree of 02 May 1995). Under the terms of a voluntary work contract, a

voluntary worker must receive: training; a regular subsistence allowance and benefits in kind; payment

of travel expenses and repatriation; medical and civil liability insurance; Social Security cover; and

technical support. Welfare protection is also guaranteed under the provisions regarding voluntary

insurance for French expatriates (the Fund for French nationals abroad [CFE]).

The value of the contribution made by international voluntary workers is assessed using the following method:

Médecins du Monde knows the exact number of voluntary workers engaged in one or more programmes over the course of a financial year. This number of variable-length programmes equates to a certain number of days, and that number of days can be expressed in terms of their full-time equivalence per month/per person. Each volunteer’s working profile is matched to a similar function already carried out within Médecins du Monde, allowing the theoretical cost to payroll to be calculated using Médecins du Monde’s internal pay scale.

Any allowances and benefits in kind which have actually been paid to these voluntary workers are deducted from this total.

On 31 December 2016, international voluntary worker contributions totalled $675K.

4.15. OTHER INFORMATION

Statutory Auditor’s Fees

The Statutory Auditor’s fees shown in the Income Statement for the financial year ended on the 31/12/2016 amounted to $87 658.

Administrators’ expenses:

In the course of the financial year 2016, the Association’s administrators incurred travel and programme expenses of $94 557. These included travel for international programmes.

Remuneration of the Association’s Chair:

In compliance with the statutory provisions and with Article 261-7-1-d and Article 242 C of Appendix II of France’s General Tax Code, Médecins du Monde remunerates the position of Chair of the Board of Directors.

The upper limit for this remuneration is set at 1.3 times the ceiling set by French Social Security or by whichever body is used as a reference instead. This remuneration, which is intended to be a gross amount, may not be paid for more than 3 terms of one year each, whether or not they are consecutive.

The remuneration paid for 2016 came to $51 925.


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Remuneration of the Association’s three most senior executives, whether volunteers or paid employees (Article 20 of Act 2006-586 of 23 May 200 6):

The Association’s three most senior executives, whether volunteers or paid employees, are the Chair, the Treasurer and the General Secretary.

Only the Chair is remunerated, as indicated in the previous paragraph, i.e. $51 925 in 2016.

Events occurring after the close of the financial y ear:

None.


22

5. TANGIBLE AND INTANGIBLE FIXED ASSETS

5.1. Fixed assets movements table

INTANGIBLES 01/01/2016 Acquisitions DisposalsFxd asset alloc.

In prog. & 31/12/2016

Subcontracted software 320 289 59 514 0 325 750 705 553Licences (software) 408 134 2 873 88 617 0 322 390

Subtotal… 728 423 62 387 88 617 325 750 1 027 942IFA Advances 0 0 0 0 0

TOTAL INTANGIBLES 728 423 62 387 88 617 325 750 1 027 942

TANGIBLE ASSETS 01/01/2016 Acquisitions DisposalsFxd asset alloc.

In prog. & 31/12/2016

LANDLand 1 841 0 0 0 1 841Marcadet land 1 264 565 0 0 0 1 264 565

Subtotal … 1 266 406 0 0 0 1 266 406BUILDINGSBuildings 0 0 0 0 0Marcadet building 2 899 968 0 0 0 2 899 968Fixtures/fittings & improvements Marcadet 5 105 242 43 808 22 769 0 5 126 281Fixtures/fittings & improvements Int. Prog. 81 448 5 999 3 475 3 475 87 447

Subtotal … 8 086 658 49 807 26 244 3 475 8 113 696OTHER TANGIBLE ASSETSFixtures and fittings 2 034 885 199 970 1 108 288 0 1 126 568Transportation equipment 5 697 681 163 087 405 342 0 5 455 426IT equipment 2 511 564 105 745 629 417 0 1 987 892Office equipment 705 574 9 514 24 551 -3 475 687 062Office furniture 577 127 0 13 493 0 563 634Medical equipment 149 667 3 828 12 019 0 141 475Communication equipment 449 841 604 0 0 450 445Audiovisual equipment 75 452 1 005 9 370 0 67 087

Subtotal … 12 201 792 483 754 2 202 481 -3 475 10 479 59 0Tangible assets in progress 325 750 0 0 -325 750 0TOTAL TANGIBLE ASSETS 21 880 606 533 561 2 228 725 -325 750 19 859 692

TOTAL 22 609 029 595 948 2 317 342 0 20 887 634


23

5.2. Depreciation table

5.3. Net book values table

INTANGIBLES 01/01/16 Amort. Recovery 31/12/16

Subcontracted software 256 261 159 015 0 415 276Licences (software) 369 642 37 687 88 617 318 711

TOTAL INTANGIBLES 625 903 196 702 88 617 733 987

TANGIBLE ASSETS 01/01/16 Deprec. Recovery 31/12/16

BUILDINGSBuilding 1 479 665 0 0 1 479 665Fixtures & fittings (Bdg) 4 454 134 133 644 23 450 4 564 328

Subtotal… 5 933 798 133 644 23 450 6 043 993OTHER TANGIBLE ASSETSFixtures & fittings 1 724 825 73 189 1 038 578 759 436Transportation equipment 5 484 321 120 837 404 302 5 200 856IT equipment 2 377 260 85 728 629 417 1 833 571Office equipment 666 770 10 484 24 551 652 703Office furniture 550 859 8 849 12 640 547 068Medical equipment 144 166 2 344 12 019 134 490Communication equipment 448 031 596 0 448 627Audiovisual equipment 72 598 560 9 370 63 787

Subtotal… 11 468 829 302 586 2 130 878 9 640 538TOTAL TANGIBLE ASSETS 17 402 628 436 230 2 154 327 15 684 530

TOTAL 18 028 530 632 932 2 242 944 16 418 518

INTANGIBLE ASSETS GROSS AMOUNTS ON 31/12/2016

TOTAL AMORTISATION ON 31/12/2016

NET BOOK VALUE ON 31/12/2016

Subcontracted software 705 553 415 276 290 277Licences (software) 322 390 318 711 3 678Adv. & downpayments 0 0 0

TOTAL INTANGIBLES 1 027 942 733 987 293 955

TANGIBLE ASSETSGROSS AMOUNTS ON

31/12/2016TOTAL AMORTISATION

ON 31/12/2016NET BOOK VALUE ON

31/12/2016

LAND

Land 1 841 0 1 841

Marcadet Land 1 264 565 0 1 264 565

Subtotal… 1 266 406 0 1 266 406

BUILDINGS

Building 0 0 0

Marcadet building 2 899 968 1 479 665 1 420 303

Fixtures/fittings & improvements Marcadet 5 126 281 4 487 723 638 558

Fixtures/fittings & improvements Int. Prog. 87 447 76 605 10 842

Subtotal… 8 113 696 6 043 992 2 069 704

OTHER TANGIBLE ASSETS

Fixtures & fittings 1 126 568 759 436 367 132

Transportation equipment 5 455 426 5 200 856 254 570

IT equipment 1 987 892 1 833 571 154 321

Office equipment 687 062 652 703 34 359

Office furniture 563 634 547 068 16 566

Medical equipment & supplies 141 475 134 490 6 985

Communication equipment 450 445 448 627 1 818

Audiovisual equipment 67 087 63 787 3 300

Subtotal… 10 479 590 9 640 538 839 052

Tangible assets in progress 0 0 0

TOTAL TANGIBLES 19 859 692 15 684 530 4 175 162

TOTAL 20 887 634 16 418 518 4 469 117


24

6. FINANCIAL FIXED ASSETS

7. STOCK

8. STATEMENT OF END-OF-YEAR CLAIMS

FINANCIAL FIXED ASSETS 31/12/16Other long-term securities 22 010Housing construction loans (tax on French employers) 693 821Deposits & guarantees 868 162

Total ... 1 583 993

STOCK 31/12/16End of year amount of stock 353 435

Depreciation of vehicle stock -37 575

Net stock amount 315 860

Gross amount 1 year maximum Over 1 year

Relating to fixed assets:

Loans (deposits and guarantees) 693 821 19 566 674 255

Other financial fixed assets 868 162 120 750 747 412

Total 1 … 1 561 983 140 316 1 421 667

Relating to current assets:

Account receivables 62 206 62 206

Funding bodies 26 669 881 18 190 362 8 479 519

personnel and related accounts 43 623 43 623

Social security bodies 110 143 110 143

State 0 0

Various debtors 1 792 928 1 792 928

Accrued income 833 732 833 732

Legacies in progress 198 441 71 899 126 542

Total 2 … 29 710 953 21 104 893 8 606 060

Prepaid costs 679 298 679 298

Total 3 … 679 298 679 298 0

31 952 234 21 924 507 10 027 727

Amount of :0 - loans granted during financial year

- loan repayments over financial year

CLAIMS STATEMENT

GRAND TOTAL (1 + 2 + 3)


25

9. ACCRUED INCOME

10. LIQUID ASSETS

10.1. Marketable values

10.2. Banks and cash funds

11. PREPAID COSTS

On 31/12/2016

159 839

67 350

0

- Accrued income 833 732 * Grants income 241 247 * other accrued income 275 272

317 213

1 060 922

OTHER RECEIVABLES :

-Discounts, reductions & rebates obtainable and cr edits receivable

- Social security bodies - accrued income

* International network

TOTAL ACCRUED INCOME :

- State - accrued income

INVESTMENTS Purchase valueShare price on

31/12/2016latent revaluation

gains latent revaluation

losses

SICAV or FCP 0 0 0

Shares 2 841 2 841 0

Term deposit account 10 275 030

Term deposit account interests 0

TOTAL 10 277 871

GROSS VALUE On 31/12/2016

Values for collection 3 713 056

Bank balances 21 799 253

Cash in hand 526 419

TOTAL 26 038 727

PREPAID COSTS On 31/12/2016

Suppliers' charges billed in advance 679 298

TOTAL 679 298


26

12. ORGANISATION’S OWN FUNDS

13. TABLE OF PROVISIONS

OWN FUNDS31

December 2015

Increase Reduction31 December

2016

Statutory Reserve 16 617 0 0 16 007Gratuities/Legacies 0 0 0 0General Reserve: Operations 16 633 186 370 934 0 16 393 728Reserve: Associative project 457 800 125 327 217 924 348 403Balance brought forward 0 0 0 0Emergency Reserve 0 0 0 0Operating Reserve 0 0 0 0Investment grants / renewable goods 0 25 982 0 25 982Investment grants 5 172 0 4 982 0Surplus allocated to investments 0 0 0 0

TOTAL 17 112 775 522 243 222 907 16 784 1202015 Surplus 288 939 0 278 336 02016 Surplus 0 1 220 667 0 1 220 667TOTAL OWN FUNDS 17 401 715 1 742 910 501 243 18 004 787

On 31/12/15Allowance for financial year

Write-back of provisions

On 31/12/16

Provisions for contingency and lossProvisions for litigation 605 969 264 931 501 181 347 482Provisions for foreign exchange losses 908 403 1 399 192 856 892 1 417 368Provisions for retirement benefit 563 259 442 032 542 589 442 032Provisions for exchange loss 0 407 078 0 407 078

Total 1 2 077 631 2 513 233 1 900 661 2 613 960

Provisions for depreciationOn financial fixed assets 0 0 0 0Other provisions for depreciation 380 322 28 030 238 544 155 851

Total 2 380 322 28 030 238 544 155 8512 457 953 2 541 263 2 139 205 2 769 811

NATURE OF PROVISIONS

GRAND TOTAL (1 + 2)


27

14. EARMARKED FUNDS

15. STATEMENT OF END-OF-YEAR DEBTS

EARMARKED FUNDS EFs at start of financial year

Provisions for outstanding

commitments (+)

Write-backs of EFs

(-)

EFs at end of financial year

(=)From grants 734 985 612 517 508 219 839 284AFRICA 0 0 0 0ASIA 348 604 0 122 562 226 042EUROPE 0 0 0 0FRANCE 386 381 612 517 385 657 613 242MIDDLE EAST 0 0 0 0From donations 635 917 0 492 026 143 891AFRICA 0 0 0 0ASIA 586 116 0 442 225 143 891EUROPE 41 715 0 41 715 0FRANCE 8 085 0 8 085 0MIDDLE EAST 0 0 0 0From legacies 0 0 0 0FRANCE 0 0 0 0

Total earmarked fundsAFRICA 0 0 0 0ASIA 934 721 0 564 788 369 933EUROPE 41 715 0 41 715 0FRANCE 394 466 612 517 393 742 613 242MIDDLE EAST 0 0 0 0

Total earmarked funds 1 370 902 612 517 1 000 245 983 175

Gross amount as at 31/12/2016

1 year maximumOver 1 year to

5 years maximum

Borrowings and similar debts 18 749 18 749 0

Accounts payable and related accounts 3 949 729 3 949 729 0

Personnel and related accounts 2 260 888 2 260 888 0

Social security bodies 2 275 195 2 275 195 0

State taxes 616 733 616 733 0

Fixed asset debts and related accounts 79 387 79 387 0

Other debts 9 507 005 3 783 778 5 723 226

18 707 686 12 984 459 5 723 226Deferred income 22 372 905 17 094 880 5 278 025

41 080 591 30 079 340 11 001 251

Borrowings repaid during financial year 0

DEBTS STATEMENT

TOTAL DEBTS …

GRAND TOTAL


28

16. TABLE OF LEGACIES AND DONATIONS IN PROGRESS

17. ACCRUED LIABILITIES

18. DEFERRED INCOME

Ongoing legacies and donations on

31/12/2015

Ongoing legacies and donations on

31/12/2016TOTAL 3 462 894 3 675 149

ACCRUED LIABILITIES On 31/12/2016Borrowings and debts with credit institutions: 0 - Accrued interest, not yet matured 0

Accounts payable and related account 1 007 649 - Invoices not yet received 1 007 649

Tax and social security debts 3 590 898 - Accrued paid leave debts 1 547 035 - Other personnel costs payable 651 170

- Social security bodies - accrued contributions 1 038 487

- Accrued State taxes 354 206

Other debts 205 372 - Miscellaneous expenses accrued 205 372

TOTAL ACCRUED EXPENSES 4 803 918

DEFERRED INCOME On 31/12/2016Foreign Grants 22 297 426 - Africa 5 989 843

- America 3 150 920

- Asia 3 495 037

- Europe 572 997 - Middle East 7 395 050

- Cross countries 1 693 581

France Grants 75 479

TOTAL : 22 372 905


29

19. OFF-BALANCE-SHEET COMMITMENTS

18.1. Commitments received

18.2. Given Commitments

Commitments received (legacies and donations) Legaci es DonationsTotal on 31/12/2016

Number of testamentary donations accepted by the board and not received 159 2 161Valuation of the amount to be received 7 159 837 36 454 7 196 291

LEASING COMMITMENTS(in USD) Financial period Cumulated Less than a year From 1 to 5 years Total to be paid

Rolling stock 19 046 54 789 3 686 0 3 686 2 756

TOTAL… 19 046 54 789 3 686 0 3 686 2 756

Paid royalties Redevances restant à payer Residual purchase price

LEASING COMMITMENTS Entry Costs Net value(in USD) Financial year Cumulated

Rolling stock 45 188 13 488 40 954 4 234

TOTAL … 45 188 13 488 40 954 4 234

Depreciation charges

Other commitmentsTotal on 31/12/2016

Security, guarantee, bond noneSecurity in rem none


30

20. EMPLOYEE STATISTICS

MdM workforce as at 31 December 2016

1 749 international programs staff

1 520 national employees

18 international solidarity volunteers

130 expatriate employees

81 head office IOD employees

2 272 French sector staff 2 137 volunteers 117 employees in the field

18 head office employees

432 operational support staff 305 voluntary association managers

127 head office employees

For a total of more than 4 000 MdM staff

Pay:

Average of the 3 highest gross annual salaries: $77 295

Average of the 3 lowest gross annual salaries: $24 164

Average gross annual salary: $38 090

Ratio 3 highest gross annual salaries/3 lowest gross annual salaries: 3.20

The lowest gross annual salary is higher than French minimum wage: + 20.70%.


31

21. OPERATING EXPENSES: DETAILS

Operating expenses 2016 2015 2016/2015Stock variation 3 207 -102 512 -103%

Sanitation equipment 1 005 590 1 667 204 -40%Housing equipment 148 889 131 322 13%

Logistics equipment 170 870 500 643 -66%Vehicles 138 367 78 657 76%Miscellaneous equipment 64 529 99 946 -35%Non-storable supplies 1 146 495 1 318 393 -13%Medicines and medical equipment 7 003 428 7 732 046 -9%Cleaning and maintenance supplies 1 028 920 1 029 269 0%International personnel equipment 163 162 185 517 -12%Expendable equipment 216 281 186 813 0%Mailing supplies 30 996 27 860 11%Food aid / foodstuffs 976 840 1 251 778 -22%Event merchandise 61 909 57 735 7%

Purchases 12 159 482 14 164 671 -14%Subcontracting 8 573 520 8 376 470 2%Leasing charges 20 135 16 542 22%Rental and rental charges 5 656 289 5 083 171 11%Maintenance and repairs 1 401 576 1 312 700 7%Insurance premiums 394 560 510 533 -23%Studies and research 55 181 90 179 -39%Miscellaneous 200 864 197 039 2%

Outside services 16 302 124 15 586 634 5%Outside staff 236 097 369 456 -36%Local staff 1 179 350 1 147 520 3%Fees 2 663 684 2 248 101 18%Advertising and publications 2 854 932 3 084 321 -7%Transportation 740 208 583 232 27%Trips / Receptions 6 139 490 6 360 447 -3%Postage and Telecommunications 2 522 240 2 693 123 -6%Bank charges 433 772 313 732 38%Miscellaneous 127 632 105 694 21%

Other outside services 16 897 403 16 905 628 0%Taxes and similar payments 3 036 430 2 834 923 7%

Salaries and pay 32 989 334 28 912 640 14%French NI contributions 8 774 637 7 794 509 13%

Personnel costs 41 763 971 36 707 149 14%Miscellaneous management costs 1 283 340 466 933 175%Grants paid by the association 9 851 743 8 832 293 12%

Other management costs 11 135 083 9 299 226 20%

Allowances for depreciation 2 925 238 2 282 079 28%

TOTAL 104 219 730 97 780 309 7%


32

22. INCOME AND EXPENDITURE STATEMENT

The Annual Income and Expenditure Statement (IES) was drawn up in compliance with the provisions of Regulation No. 2008-12 of the Accounting Regulatory Committee.

The IES explains how the Association’s overall resources were used, i.e. how they were divided up between social programmes, fundraising costs and operating costs.

The totals in columns 1 and 2 match the total expenditure and income in the Income Statement.

The IES also gives a separate breakdown of the way in which funds raised through public giving have been used. Columns 3 and 4 enable the monitoring of all such funds, whether they have been raised in the same financial year or brought forward from previous years’ unused funds.

The total shown on the Income and Expenditure Statement is always identical to the totals on the Balance Sheet and on the Income Statement.

In 2009, the Board of Directors of Médecins du Monde ruled on several aspects of the IES, including:

- the amount of unrestricted, unused funds raised from the public carried forward at the start of the

financial year;

- the definition of Médecins du Monde’s social programmes (in France and abroad);

- the definition of fundraising costs;

- the definition of operating costs;

- and the allocative keys available for indirect costs.

This year, no changes were made to our methods or to the definitions of the various headings used (social programmes, fundraising costs and operating costs).


33

Social Programmes:

Médecins du Monde’s vocation is to treat the most vulnerable people groups in crisis situations or situations of exclusion, both here in France and Worldwide, highlighting the harm caused by crises and by threats to people’s health and dignity. Its aim is to help prevent such harm and, through its witness-bearing initiatives, to denounce human rights violations, in particular the obstacles preventing access to treatment.

As an organisation authorised and empowered by the competent authorities, the Association also aims to promote adoption, in order to help those children who have been put up for adoption legally by the authorities in their country of origin, and who cannot be kept safe in any other way.

Social programmes therefore include the following:

- operations carried out in France, arranged by type of activity (centres, outreach, harm reduction,

regional delegations, exploratory programmes, witness-bearing programmes, and associated

coordination, management and monitoring costs);

- operations carried out abroad, arranged by continent, and including adoption (direct costs of

programmes, of exploratory programmes and of witness-bearing programmes, and associated

coordination, management and monitoring costs).

Information and communications costs are shown under social programmes, since the Board of Directors has decided that these activities constitute an integral part of the Association’s social purpose.

Guidelines for the allocation of expenses to social programmes:

Expenditure on social programmes is the sum of the costs incurred by the Association in pursuit of its operations. Expenditure on social programmes therefore includes direct costs (charged as soon as transactions are entered in the accounts) and costs that cannot be directly assigned and are therefore shared out using allocative keys. Only an expense which has actually been incurred is assigned to a specific social programme. Provisions are recorded under the headings ‘Charges to Provisions’ or ‘Write-back of Provisions’ in the Annual Income and Expenditure Statement, depending on whether they are being created or recovered. Allowances for depreciation can be classed as operational expenses if the above definition applies. Only financial costs linked directly to social programmes (and which would disappear if the social

programme in question came to an end) should be recorded under social programmes.


34

Fundraising Costs:

- Costs of appeals for public giving:

This heading includes the costs of appealing for donations (marketing, direct mail advertising, newspaper inserts, etc.) and the costs of processing donations, issuing tax receipts, and finding and managing legacies, as well as donations linked to life insurance, managing special events, dedicated personnel costs, and the costs of fundraising from other network members.

Some of the costs for the donors’ newsletter are charged to this heading (cf. allocative keys below).

- The costs of finding other sources of private funding:

This heading includes the costs of the Corporate Sponsorship & Partnerships Department;

- The costs of obtaining grants and other public-sector participation:

This heading includes the costs of the department dedicated to public-sector and institutional funding [DDI].

Operating Costs:

Operating costs include the costs of the following departments:

- Administration and Legal Affairs; - Directorate of Financial Management and Head Office Accounts; - IT (excluding its share of provisions for depreciation divided up on the basis of the guideline below); - General Services (excluding their share of allowances for depreciation divided up on the basis of

the guideline below); - HR directorate; - financial costs (excluding costs directly attributable to particular programmes); - some salary-based taxes; - Head Office depreciation (excluding its share of allowances for depreciation divided up on the basis

of the guideline below).

Allocative Keys used:

• Head office depreciation is divided up into 50% operating costs and 50% social programme costs.

Half the equipment and fixtures are in actual fact used by programme-related departments.

• Costs relating to the donors’ newsletter are considered partly as a means of/tool for telling people

about initiatives we have carried out, and partly as the costs of raising income through public

giving.

• Under social missions, all the headings covering both french and international operations are

divided up using the following key: 75% to international programmes and 25% to French

programmes.

This following headings fall into this category: General Directorate, Board of Directors, Financial

Management and Internal Control Coordinator, Provisions and miscellaneous taxes, etc.


35

Funds from public giving:

Funds from public giving are: donations from private individuals and businesses (excluding corporate

sponsorship, sales-percentage and partnership agreements); legacies; donations linked to life insurance; income from special events; and funds raised from other network members.

Other private funds:

Other private funds include: - funds received from businesses in the form of corporate sponsorships, sales percentages or partnerships; - grants received from private, not-for-profit organisations.

Grants & other public-sector participation:

This heading includes grants from the European Union and the French State, and from local authorities and public-sector institutions.

Other income:

Other income includes: - financial income from reserves created by the Association to cushion it against contingencies

We believe that the investments chosen are among the safest on the market (money market

investments, and interest-earning accounts and deposits); - miscellaneous operating income; - subscriptions; - contributions to the ‘Adoption’ service.

Allocation of income from public giving:

Once any allocated funds received (whether grants, donations, legacies or funds from corporate

sponsorship) have been used, any unallocated income from public giving is used as far as possible to fund social missions.

According to this guideline, the order in which income is allocated to expenditure is as follows: - Allocated grants; - Other allocated, private funds; - Allocated public giving; - Unallocated public giving; - Other unallocated, private funds or other income.

In the event that not all the income received from public giving can be used to fund social missions,

the balance is put firstly towards fundraising costs, then towards operating costs.


36

Income from corporate sponsorship is used as far as possible to fund the search for further corporate

sponsorship, and the percentages for administrative costs awarded along with public-sector grants are used as far as possible to fund the search for further grants, after which they can be put towards the Association’s operating costs.

Changes to Earmarked funds from public giving:

These changes show either that the funds allocated by a donor have been used, or, when it has not

been possible to use a donation as requested by the donor, the continued existence of earmarked funds.

Funding of Fixed Assets:

As far as possible, fixed assets are funded from income other than that derived from public giving.

Inventory of French volunteer workforce:

2 137 French volunteers intervened in 2016 - the Full Time Equivalent of 132,29 people.

Nature and quantity of income in kind:

See comments on this subject under Point 4.14 of Accounting Rules and Methods above. The information presented here has been drawn up on the basis of our accounting records.


37

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38

Part 2

Analysis of the 2016 Accounts


39

1. INCOME STATEMENT

The financial activity of Médecins du Monde has increased by 5%, which is less than the previous years

but still sustained.

This increase is due to the social programmes (+7%), both international and French.

The financial year is in surplus (+$1.3 M before charging on the reserves for associative projects, the

expenses concerning the French innovating projects and the adaptation of premises).

Three factors had a positive impact on the accounts between 2015 and 2016:

o A better project funding from the funders (public or private) and the general public generosity.

The effect is heightened by the recovery of dedicated funds of the past years.

o The persistent confidence of the general public, in France and in Europe. The fundraising

(France and International) increased by $0.9M, increase that is even more noticeable than last year was

remarkable due to the Nepal emergency and the related large public engagement.

o More important donor funds specially dedicated to cover administrative expenses of the

projects. This allowed our association to better cover the running costs.

In 2016, Médecins du Monde updated the calculation of the exchange gains and losses concerning the

donors contracts in foreign currencies (cf part 1).

Before this year, the variation between currencies impact on the contract products was only calculated

at the end of the contract. From now on, the variation impact is calculated at the end of each financial

year, which allows a better reporting of the programmes annual economic result.

At the end, gains and losses concerning the contract is still the same but the result is calculated

according to the real programme implementation.

The update of the calculation of the exchange gains and losses method ended up with an extra cost of

$0.8 M which partly explains the financial year result decrease.

1.1 Operating result

1.1.1 Operating income

Operating income stands at $105.7M for 2016. This increase of $6.7M in 2016 (+6%) is due to higher

public and private sector grants (+$4.9M, + 10%) and also to the write-back of provisions and transfer of costs (+$1.7M) – see below.

Our main sources of funding were private giving ($50.9M), public-sector grants ($48.1M) and private-

sector grants ($4.1M).

It is this crucial balance between private and public income and our efforts to diversify the sources of our funding that enables our organisation to maintain its financial independence.

In thousand of $ 2014 2015 2016INCOME 99 691 101 218 107 697 EXPENSES 103 580 100 923 106 406 SURPLUS/DEFICIT 3 889 - 294 1 291


40

Income from generosity of the public in France and within the international was virtually the

same as in 2015 (-$0.1m). Results were mixed here, with continuing growth in funds raised from the

general public, both in France and internationally, and a decrease in income from legacies and other

similar donations.

French fundraising from the individuals grew by $0.6Mto reach $42.6M (+1%).

This increase is remarkable given that the Nepal emergency appeal in 2015 generated an exceptional

amount of fundraising, with donations estimated at $2.2M. This increase reflects the success of

investments made in developing direct debits and, more generally, of our communication campaigns with the general public.

Income from International Network fundraising reached $2.6M, an increase of $0.4M on 2015

(+20%) – or $1.3M, if we deduct donations for the Nepal emergency from 2015 figures. This result is largely due to MdM’s strategy to develop fundraising that is currently being implemented with other

Network members.

Income from legacies and other similar donations reached $5.8M, down by $1M against 2015.

However, 2015 included the balance of a particularly large legacy ($1M), as well as adjustments from

old files, notably life insurances.

Public-sector grants also continued to grow (+$4.6M, or +10% against 2015), due to the

development of our social programmes, especially our Migrant programmes.

There was a slight increase in private-sector grants and corporate sponsorship (+$0.3M, or +6%

on 2015, with a total of $4.1M), due to strong support in France for our Migrants programmes and

profitable contacts established through our International Network (US and UK). The write-back of provisions ($2.2M) was particularly high in 2016, as several liabilities or

litigations for which there were provisions, were brought to a conclusion during the financial year.

The detail is as follows:

- Write-backs of provisions offset by the recognition of an expense stood at $1.3M. They did not affect

the result.

- Certain provisions were no longer required (the liability did not materialise), and their write-back added

$0.3M to the result.

- Finally, the provision for retirement benefits is written back and re-appropriated each year. The amount of the write-back of this provision in 2016 was $0.6M. The appropriation is given in the expenses below.

1.1.2 Operating expenses

The increase in operating expenses in 2016 (+6%) is linked to the growth in our social missions (+7%

on average).

The most notable changes were as follows:

- Purchases: the decrease (variation 2015/2016: -$2.1M) is due to a reduction in the quantity of

pharmaceutical products purchased compared with 2015 (especially in countries affected by the Syrian


41

crisis) and the closure of some completed programmes (rehabilitation of building and water conveyance in Ivory Coast, Nepal emergency, etc.); - Staff costs (variation 2015/2016: +$4.8M): the increase in expenses concerns both staff under French

contracts (+$2.7M) and staff recruited locally on international programmes (+$2.1M) and is due to the

growth in our activities and the strengthening of supervisory functions.

- Grants awarded (variation 2015/2016: +$0.9M): these grants are awarded by MdM to:

• Local institutional or civil society actors taking over our programmes in accordance with our Mission statement - $6.2M in 2016

• Members of our International Network to help them set up field or advocacy programmes and develop their fundraising - $3.7M in 2016.

- Other expenses ( variation 2015/2016: +$0.8M)

The increase in expenses under this item in 2016, for a global amount of $1.3M, is mainly due to losses recorded against debts or litigation linked to our operations abroad.

These losses had been anticipated and provisions for write-offs had been made. These provisions were

reversed at 31/12/2016 (see above), thereby cancelling out the impact of these expenses on the result.

- Provision (variation 2015/2016 :+$0.4M)

The main provisions over the financial year were for liabilities linked to our international operations, write-offs and the annual adjustment to the provision for retirement benefits. Given the decline in international adoption, a provision was also made for the progressive closing of our Adoption operation.

1.2 Financial result

The latter shows a $0.6M loss for the financial year, mostly due to the update of the calculation of the

exchange gains and losses method.

Our financial income deriving from our investments (sometimes linked to the gap recorded between our

income and expenditures) are slightly higher compared to 2015 (+$0.01 M) despite the decrease of the

reference rates.

Indeed, currency rates dropped in 2016 and stayed negative.

For the record, our investment policy prefers money-market investments (deposits or short-term

accounts, Sicav/FCP), which represent some of the most secure assets on the market.

1.3 Extraordinary profit, corporate tax (IS) and ch anges in dedicated funds:

The extraordinary profit (-$0.07 M) requires no particular comment.

The income from a number of our investments are concerned by the corporate tax, at the reduced rate.

The change in dedicated funds (unused resources carried forward/outstanding commitments), is mainly

due to the transfer to 2016 of the use of funds received for Nepal in 2015 (+$ 0.4M).


42

2. BALANCE SHEET

The balance sheet total ($62.7M, i.e. +$8.3M compared to 2015) was affected by the increase of donors’

claims (+$9M on asset) and from deferred incomes connected to grants (+$3.5M on debt). The number

of donor’s contracts is increasing compared to 2015.

For the record, agreements with donors are recorded as debts as soon as the agreement is signed,

whatever the time period covered; and the deferred incomes represent the portion of the grant

concerning future financial years.

The fixed assets are stable, $6M.

The main investments are a new Parisian RHAC and Ile de France delegation localisation (offices

avenue Parmentier were transferred Boulevard de Picpus), the new internet website and a patient

record software.

The liquid assets decreased by $0.9M.

Our own funds increased by the surplus amount recorded on the financial year. On 31/12/2016, they

were of $18M, which is 2.19 months of operation.

The debts item increased by $3.5M due to the strong increase of the consortia item (which reflects our

activities in consortia with other NGOs), and the increase of the suppliers item (which is due to an

intense fundraising activity at the end of the year.

ASSETS (In thousand $) 2015 LIABILITIES 2016 2015Brut Amort/Prov Net Net

Fixed assets 22 472 16 419 6 053 5 994 Equity 18 004 16 763 Stocks 354 38 316 340 Provisions for liabilities and charges 2 613 2 001 Claims 29 711 119 29 592 20 130 Dedicated funds 984 1 371 Cash 26 041 - 26 041 26 975 Debts 18 708 15 268 Prepaid charges 679 - 679 868 Deferred income 22 372 18 903 TOTAL 79 257 16 575 62 682 54 307 TOTAL 62 682 54 307

2016


43

3. INCOME AND EXPENDITURE STATEMENT

Method for the calculation of ratios1

3.1 Expenditure

In 2016, the growth in our social programmes (+7% compared with 2015, i.e. +$5.6M) goes with our

fundraising costs decrease (fundraising investments on the international network are lesser) as well as

the operating costs stabilisation.

Social Programmes represented 82.6% of total expenditure, an improvement on last year’s ratio.

3.1.1 Social programmes

The distribution between French social programs and international social programs is stable.

1 Ratios are calculated on the basis of the Annual Income and Expenditure Statement, excluding charges to provisions and outstanding commitments from earmarked funds. Their calculation is based on the line, ‘Total 1’, of the Income and Expenditure Statement (the line headed ‘Total expenditure for the financial year recorded in the Income Statement’).


44

FRENCH PROGRAMMES

Geographical distribution

The amounts correspond to the expenditure, coordination excluded and earmarked funds included

Distribution by domain

2015 2016

4 345 4 770

1 017 1 138

2 176 2 332

18 -

729 718

3 669 3 915

11 952 12 873

In thousands $s

Coordination and Management of French

Total

Reception, Healthcare and Advice Centres

Harm Reduction

Other French Programmes

Exploratory Programmes

Witness-bearing Programmes


45

2016 KEY EVENTS

1. Refugees reception crisis

Operational implementation in the Hauts de France region was reinforced with 9 salaried personnel as well as important private funds received at the end of 2015. Health monitoring and Médecins du Monde RHAC activities were continued. Explorations and watch on the Italian border were undertaken.

2. Positions creation to support innovating operati onal dynamics

Health in rural areas Haute Vallée de l’Aude, unaccompanied foreign minors in Caen, health in fragile urban areas South Lille

3. New programmes

• Unaccompanied foreign minors in Caen (Normandy) • Migrants Rights and Health Nantes (Pays de la Loire) • Health in rural areas Haute Vallée de l’Aude (Languedoc-Roussillon • Health in fragile urban areas South Lille (Hauts de France) • Cervical cancer prevention transversal programme

4. Changes in programmes

• RHAC Cayenne changed into mobile actions • RHAC Paris changed into a Reception, Counselling and Accompaniment Center (RCACs)

5. Closed programmes

• RHAC Angers • RHAC Nantes • RHAC Valenciennes • Homeless project Poitiers


46

INTERNATIONAL PROGRAMMES

Geographical distribution

The amounts correspond to the expenditure, coordination excluded and earmarked funds included.

Distribution by domain

In thousands $s 2015 2016Africa 19 674 18 317 Latin America 3 328 4 110 Asia 8 396 7 226 Eastern Europe 1 167 3 583 Middle East/Maghreb 18 951 23 203 Regionally-managed International Programmes 123 43 Exploratory Programmes 94 72 Cross-sector Programmes 736 1 040 Operation Smile 532 420 Adoption 522 485 Expansion of International Network 3 712 3 199 Witness-bearing Programmes 2 160 2 156 Programme Coordination and Management 8 278 8 402

Total 67 672 72 257


47

FOCUS ON AFRICA Expenditure in 2015: $20.2M (including provisions and dedicated funds) Expenditure in 2016: $18.3M 2016 Key events

2016 main events are: • The closed programme in Mali beginning of the year • The activities increase in CAR and the Nigeria opening • The closed programme in Liberia on Ebola activities • The closed children in the streets programme in Kinshasa, as well as the closed mental health

programme in Goma, this goes along with the Goma office stand-by (DRC) • A new Reproductive and Sexual Health/ Gender based violence activity in Somalia going alongwith

the Bosaso Hospital support • 20 extra health centers supported concerning the Kanem programme in Tchad (42 vs 22 in 2015)

Financial weight per country in $


48

FOCUS ON LATIN AMERICA AND THE CARIBBEAN Expenditure in 2015: $3.3M Expenditure in 2016: $4.1M 2016 Key events

2016 main events are: • The expenditure increase in Haiti due to Matthews hurricane • The activities decrease in Colombia • The activities increase towards Central American migrants



49

FOCUS ON EURASIA Expenditure in 2015: $10.7M (including provisions and dedicated funds) Expenditure in 2016: $10.8M ASIA 2016 Key events After 2 countries closed and 4 programmes closed in 2015, 2016 has seen a reinforcement accompanied with medical human resources support:

• Reproductive and sexual health: programme focus was put on unwanted pregnancy, teenagers, large cities and South Asia thematic

• Harm reduction: “Do less but better” • Harmful environments: An overview of the e-waste project in Manila was performed in order to

be able to reproduce it elsewhere, and an exploration was launched in Nepal • Disaster risk reduction: 4 countries developed activities on disaster risk reduction approach, 2

different funding were obtained and guidelines were validated in May 2016 • Emergency answer: the emergency period being over, programmes in Nepal are under the long-

term Unit responsibility. Evaluations were led following the emergencies in Sri Lanka and Philippines



50

EUROPE 2016 Key events

• Migrations, Rights and Health: European reception and solidarity crisis answer was developed and therefore several projects were opened: Italy, Serbia, Bulgaria, boat on the Mediterranean sea, Greece

• Russia and Georgia projects’ reinforcement, innovating projects modelling ( Hepatitis C treatment in Georgia, Sex workers in Russia), and strong activities increase in Ukraine (+$1.6M)

• Programme closure in Moldavia



51

FOCUS ON THE MIDDLE EAST / MAGHREB Expenditure in 2015: $19.5M (including provisions and dedicated funds) Expenditure in 2016: $23.2M 2016 Key events

2016 main events are: • Programme closure in Jordan • Activities re-opening in Yemen (+$1.2M) • Activities increase in Iraq (+$1.4M) and in Turkey / Syria (+$2.1M)



52

3.1.2 Fundraising costs

In the course of the financial year, fundraising costs fell from 13.6% to 12.5% of total expenditure.

They decreased slightly in terms of their value -$0.3M (-2.6%) due to the fact that the general public

database was migrated and all the fundraising operations foreseen didn’t occur.

3.1.3 Operating expenses

Operating expenses increased in value (+$0.3M i.e. +6.8%) for the financial year, but were relatively

stable in terms of weight of total expenditure (4.9% in 2016 compared to 4.8% in 2015).

3.2. Funding sources

Our funding has already been analysed in an earlier part of this report. It should, however, be emphasised that we strive to maintain a balance between public-sector and

private funding. Despite the strong growth shown by public-sector grants (+$4.4M) due to the expansion of our programmes, they accounted for 44.6% of our total revenue which represents less than 50% of our total revenue.


53

Part 3:

Special Report on

Regulated Agreements


54


55


56


57


58

Part 4:

2017 Budget


59

Comments on the 2017 budget

The 2017 budget was approved by the Board of Directors on 17 December 2016.

It is presented in the form of an Income and Expenditure Statement, and describes the activities of our

Association (‘Expenditure’), and the income used to fund these activities (‘Income’). Provisions for

contingencies concerning not obtained grants are included in the expenditures.

It has been prepared using a participatory, structuring process, i.e. a framework memorandum on

policy and budgetary orientation (July), Joint Strategic Committees (September), and Joint Budgetary

Committees (November).

For the first time, the budget was built on 3 years i.e. 2017, 2018 and 2019.

Only the 2017 budget was approved during the 2017 held General Assembly. The 2 others years will

be updated further on.

The Board of Directors decided to put a balanced budget to the vote at the General Assembly (after

taking into account the reserve created for association project during the 2015 and 2016 General

Assemblies).

This budget answers the Board of Directors priority requests:

• Health and Advocacy Direction creation

• Creation support and implementation of the International network roadmap

• Associative life promotion

• Decentralization management implementation concerning actions led in France and

internationally

• Information system master scheme implementation

• Strengthened support to South NGOs partnership

2017 budget expenditure

The growth in our activities continues in 2017, with our overall volume of expenditure ($115M)

increasing by $12M compared with the actual figures for 2016.

This growth reflects the expansion of our social programmes in France and abroad, in particular the

expansion of our emergency programmes (Syrian crisis, Iraq, Nigeria, Yemen …).

Expenditure 2017 Budget Income 2017 Budget

Social Programmes 96 293 485 Funds raised from the general public 50 958 729

Activities carried out in France 13 453 757 Donations 41 267 622

Activities carried out abroad 82 839 727 Legacies, other gratuities 7 054 827

Fundraising costs 13 810 287 Other revenue from appeals to public generosity 2 636 280

Costs of appeals to public generosity 12 994 613 Sponsorship 0

Costs of fundraising from other private sources 507 922 Other private funds 5 212 999

Costs related to applications for grants and other public

sector funding307 751 Grants and other public sector funding 58 861 952

0,00 0 Other revenue 447 120

Running costs 5 420 209 Deficit for the financial year 43 181

Total 115 523 980 Total 115 523 980


60

Social programmes

The total volume of social programmes shown in the 2017 budget is therefore $96M, an increase of

$13M compared with the actual figures for 2016 ($83M).

The ratio of social programmes to total expenditure works out at 83.3%, compared with 82.6% in 2016

(actual figures).

International programmes are showing significant growth, and their financial volume for 2017 is set at

$83M, compared with $70M in 2016 (+18%).

Budgetary growth continues in the French sector too, increasing from $12.5M in 2016 to $13.5M in

the 2017 budget (+8%).

Fundraising costs

Fundraising costs have gone from $12.5M in 2016 (actual figures) to $13.8M in the 2017 budget. This

reflects the strong will to enlarge the donors’ database.

Even though their actual value has increased, fundraising costs are stable: 12% of 2016 and 2017

budget.

Operating costs

Operating costs have slightly risen (to $5.3M in the 2017 budget, compared with actual figures of

$4.8M in 2016). Their impact on expenditure in 2017 is slightly decreasing to 4.5%, compared with 5%

in 2016.

2017 budget income

Revenue from the general public are slightly increasing ($51M in the 2017 budget compared with

actual figures of $49M in 2016), and this despite the estimated legacies amount increase (+$1.4M in

the 2017 budget compared with the 2016 actual figures).

Public-sector grants continue to show strong growth in 2017, amounting to $58.8M (compared with

$46M in 2016).

In the 2017 budget, they represent 51% of total income, while total private funds and funds from public

giving account for 49%.

2017 budget conclusion

This 2016 budget, balanced after taking into account the reserve created for innovative projects during

the 2015 and 2016 General Assembly, reflects the Organisation’s strategy and its desire to:

• Keep on developing its social programmes in France and abroad, in a world marked by

multiple crises and growing needs, whilst adapting its programmes in accordance with the

strategic plan’s areas.

• Pursue the funding diversification in order to guarantee the financial independence

• Maintain its own funds and secure financial solidity in relation to the scope of its global growth.


61

Documents

Médecins du Monde 2016 Financial Report 2016 GB USD.pdfMédecins du Monde 2016 Financial Report 2 A WORD FROM OUR TREASURERS In a context of controlled growth (+5% against +17% between