2014 - Kirkens Nødhjelp · short-term in nature and that there are certain risks involved in the implementation of projects, and it would therefore not be appropriate to depreciate

2014Financial Statements

In crises, water is critical. In South Sudan Norwegian Church Aid provides clean drinking water to thousands of people. Photo: Paul Jeffrey/ACT Alliance

2 - Norwegian Church Aid - FINANCIAL STATEMENTS 2014

STATEMENT OF FINANCIAL ACTIVITIES 2014 ....................................... 3BALANCE SHEET AS PER 31 DECEMBER 2014 ..................................... 4CASH FLOW STATEMENT 2014 ............................................................... 5NOTE TABLE OF CONTENTENTS ............................................................. 6

NOTE 1 ACCOUNTING PRINCIPLES .......................................................................................7NOTE 2 FUNDING FROM NORWEGIAN GOVERNMENT AGENCIES .......................................9NOTE 3 FUNDING FROM UN, ACT AND OTHER ORGANISATIONS...................................... 10NOTE 4 DONATIONS .............................................................................................................. 12NOTE 5 INTERNATIONAL COOPERATION ............................................................................. 13NOTE 6 GOVERNANCE COSTS .............................................................................................. 15NOTE 7 AUDITORS’ REMUNERATION ................................................................................... 15NOTE 8 EMPLOYEE AND STAFF COSTS ................................................................................ 16NOTE 9 FIXED ASSETS ........................................................................................................... 17NOTE 10 STOCKS ................................................................................................................... 18NOTE 11 DEBTORS ................................................................................................................ 18NOTE 12 INVESTMENTS ....................................................................................................... 18NOTE 13 FUNDS ..................................................................................................................... 19NOTE 14 ACCRUALS FOR PENSION LIABILITIES ................................................................ 20NOTE 15 BANK LOAN ............................................................................................................ 21NOTE 16 SHORT-TERM LIABILITIES ..................................................................................... 21

REPORT OF THE BOARD OF DIRECTORS, 2014 ................................... 221. THE NATURE OF ACTIVITIES AND OPERATIONS ............................................................. 222. GOING-CONCERN EXPECTATION .................................................................................... 223. WORKING ENVIRONMENT ............................................................................................... 224. ENVIRONMENTAL CONSIDERATIONS ............................................................................. 225. EQUAL OPPORTUNITY ...................................................................................................... 226. PROSPECTS FOR THE NEXT YEAR ................................................................................... 237. RISK MANAGEMENT ......................................................................................................... 238. THE ACCOUNTS FOR THE YEAR ...................................................................................... 249. CONCLUSION .................................................................................................................... 24

INDEPENDENT AUDITOR’S REPORT .................................................... 25

Norwegian Church Aid - FINANCIAL STATEMENTS 2014 - 3

STATEMENT OF FINANCIAL ACTIVITIES 2014

(NOK '000) Notes 2014 2013

INCOMING RESOURCES

Institutional grantsNorad - The Norwegian Agency for Development Cooperation 287 946 254 886MFA - The Norwegian Ministry of Foreign Affairs 246 568 161 109Other Government Agencies 8 826 14 688Administrative support from Government Agencies 37 188 29 031Subtotal Norwegian Government Agencies 2 580 528 459 714

UN - United Nation Agencies 25 411 26 578ACT Alliance and other ACT sister organisations 39 471 45 545Other organisations 57 270 69 985Administrative support from UN, ACT and other organisations 1 474 2 525Subtotal UN, ACT and other organisations 3 123 626 144 634

Total institutional grants 704 154 604 348

DonationsUnrestricted donations 132 495 118 815Restricted donations 8 111 18 669Donations from Telethon 2014 253 005 0Testamentary donations and legacies 12 655 13 410

Total donations 4 406 267 150 894

Investment income 5 358 13 487

Other incoming resources 373 766

TOTAL INCOMING RESOURCES 1 116 152 769 495

RESOURCES EXPENDED

Costs of Generating Other Donations 36 625 30 701

Costs of Generating Donations from Telethon 33 932 0

Long-term development cooperation 520 021 461 738Humanitarian assistance 193 629 159 794Advocacy for global justice 68 633 69 138

Total International Cooperation 5 782 283 690 671

Governance Costs 6 43 373 49 132

TOTAL RESOURCES EXPENDED 896 214 770 504

NET INCOME (EXPENDITURE) FOR THE YEAR 219 938 (1 009)

NET INCOME (EXPENDITURE) FOR THE YEAR EXCL. TELETHON 865 (1 009)

Net movement in FundsTransfer to (from) unrestricted funds 18 647 3 795Transfer to (from) funds with internally imposed restrictions (2 371) 427Transfer to (from) funds with externally imposed restrictions 203 662 (5 232)

Total net movement in Funds 13 219 938 (1 009)

Norwegian Church Aid

Statement of Financial Activities 2014

Page 1 of 1


(NOK '000) Notes 31.12.2014 31.12.2013

ASSETS

Tangible Fixed Assets 9 54,830 57,576 Subtotal Fixed Assets 54,830 57,576

Stocks 10 2,716 1,522 Debtors 11 301,675 94,820 Investments 12 71,040 101,753 Cash at bank and in hand 252,914 171,538 Subtotal Current Assets 628,345 369,633

TOTAL ASSETS 683,175 427,209

FUNDS AND LIABILITIES

FUNDSUnrestricted funds 135,766 117,119 Funds with internally imposed restrictions 10,998 13,369 Funds with externally imposed restrictions 243,860 40,198

TOTAL FUNDS 13 390,623 170,685

LIABILITIESAccruals for pension liabilities 14 26,180 20,297 Bank loan 15 23,100 25,200 Other long-term debtsTotal long-term liabilities 49,280 45,497

Project balances, advances from donor 171,085 152,042 Other short-term liabilities 16 72,187 58,984 Total short-term liabilities 243,272 211,026

TOTAL LIABILITIES 292,552 256,524

TOTAL FUNDS AND LIABILITIES 683,175 427,209

Norwegian Church Aid Balance Sheet as per 31 December 2014

Oslo, April 27th 2015

Sissel VartdalBoard member

Liv SnesrudBoard member

Katharina Ringen Asting

Board memberHanne Sofie Lindahl

Board memberIngeborg S. Midttømme

Dag J. OpedalBoard member

Kjell B. NordstokkeChairman of the Board

Ottar MæstadBoard member

Board memberInger Marit Nygård

General SecretaryAnne-Marie Helland

Board member

Billy Taranger

Board memberBrita Bye

Board memberJens Aas-Hansen

Board member

Page 2 of 20

BALANCE SHEET AS PER 31 DECEMBER 2014


(NOK '000) 2014 2013

Cash flow from operating activities Net incoming (outgoing) resources 865 (1,009)Net incoming (outgoing) resources from the Telethon 2014 219,073Depreciation of fixed assets 12,982 11,478Difference between pension contribution and current service costs 5,883 5,968Changes in current balance sheet items related to the Telethon 2014 (213,766)Changes in other current balance sheet items 37,963 47,404Items classified as investing or financing activities (5,358) (11,417)Net cash inflow from operating activities 57,643 52,425

Cash flow from investing activities Purchase of tangible fixed assets (14,968) (8,201)Disposale of tangible fixed assets 4,732 0Change in net investment in financial assets 36,071Net cash flow from investing activities 25,835 (8,201)

Cash flow from financing activities Repayment of long-term and short-term loans (2,100) (2,100)Net cash flow from financing activities (2,100) (2,100)

Net cash flow during the year 81,377 42,123

Cash at bank and in hand at Jan 1. 171,538 129,414Cash at bank and in hand at Dec 31. 252,914 171,538

This consists of:Cash at bank and in hand 252,914 171,538

Cash Flow Statement 2014Norwegian Church Aid

Page 3 of 20

CASH FLOW STATEMENT 2014


NOTE TABLE OF CONTENTENTS

NOTE 1 ACCOUNTING PRINCIPLES

NOTE 2 FUNDING FROM NORWEGIAN GOVERNMENT AGENCIES

NOTE 3 FUNDING FROM UN, ACT AND OTHER ORGANISATIONS

NOTE 4 DONATIONS

NOTE 5 INTERNATIONAL COOPERATION

NOTE 6 GOVERNANCE COSTS

NOTE 7 AUDITORS' REMUNERATION

NOTE 8 EMPLOYEE AND STAFF COSTS

NOTE 9 FIXED ASSETS

NOTE 10 STOCKS

NOTE 11 DEBTORS

NOTE 12 INVESTMENTS

NOTE 13 FUNDS

NOTE 14 ACCRUALS FOR PENSION LIABILITIES

NOTE 15 BANK LOAN

NOTE 16 SHORT-TERM LIABILITIES

NORWEGIAN CHURCH AID - FINANCIAL STATEMENTS 2014

Page 4 of 20

NOTE TABLE OF CONTENTENTS




The annual accounts have been prepared in compliance with the Norwegian Accounting Act and Norwegian accounting standards for NGOs.

The main principles are:

Representations abroadAt NCA Representations abroad there are assets as capital, inventory and other assets. All Representations' transactions are reflected in the NCA's consolidated financial statements.

Receivables and liabilitiesLong-term receivables and liabilities are valued at nominal value at the time of establishment.Current liabilities are valued at nominal value at the time of establishment.

Fixed and current assetsInvestments in tangible fixed assets at Head Office is capitalized upon acquisition. Fixed assets are valued at historical cost less depreciation. Direct maintenance costs are expensed when incurred, while improvements are capitalized and depreciated accordingly. Booked value of assets are written down if the fair value is estimated to be lower than the booked value and the impairment is not expected to be temporary.

Representations abroad follow other principles for accounting of their assets. The fixed assets are expensed upon purchase; reference is made to impairments in note 9. The reason for this is that the projects are short-term in nature and that there are certain risks involved in the implementation of projects, and it would therefore not be appropriate to depreciate the fixed assets in accordance with ordinary principles.

Financial investmentsNCA's investments are subject to active management and are regarded as current assets carried at fair value as of 31.12.

TaxIn accordance to Norwegian Tax Law Norwegian Church Aid is not considered taxable.

Incoming resourcesIncoming resources consist of institutional grants, donations, investment income and other incoming resources. Donations, both restricted and unrestricted, are recognized as income in the same period that they are earned. Restricted funds that are not spent in the accounting period are accounted as funds with externally imposed restrictions. Restricted funds from previous years used this accounting period are booked from funds with externally imposed restrictions; see note 13.

Funding with repayment requirements (i.e. public funding) is not recognized as income when received. Received funding is booked as a liability in the balance sheet until the funds are used for the activity the grant was intended for. The funding is recognized as income when the recipient has the legal right to the grant which will be when the funds are actually used for the activity for which the funding was granted. The grant income is recognized gross when the conditions are met.

Page 1 of 2


Resources expendedExpenses are to the greatest possible extent directly attributed to the activities to which they belong. Resources expended on international cooperation are fulfilling the organisation's purpose, and include distributions and allocations to partner organisations, costs associated with the Department for International Programmes and Development Policy at Head Office, as well as operational costs in the countries where programmes are implemented. Costs are expensed in the period in which the activity took place.

Governance costs cover the activities necessary to run the organisation; including planning, management and evaluation of the organisation's activities. Governance costs include depreciation, fees paid to external auditors, lawyers and consultants, personnel costs of the HR department, finance department and the General Secretariat, travel, IT costs and financial costs.

Costs of generating donations include personnel costs related to fundraising, advertising and media campaigns and distribution of materials.

All personnel costs related to the Department for Fundraising, the Department for Communications, the Department for International Programmes and the Department for Development Policy are classified as respectively costs of generating donations and expenses related to international cooperation. This is in accordance with the guidelines from the Norwegian Control Committe for Fundraising.

Unused project funds as of 31.12 are recognized in the balance sheet under "Project balances, advances from donor".

Foreign currenciesAssets and liabilities in foreign currencies are valued at the exchange rate on the balance sheet date. Currency risk is carried by the projects as the contracts signed with donors are primarily in NOK.

When consolidating, NCA Representations' statements of financial activities are converted at the average rate for the year. Balance sheets are converted at the exchange rate at the balance sheet date. Exchange differences relating to income and balance sheet are booked directly against funds.

PensionsNorwegian Church Aid has pension schemes equal to public-service pension schemes. Pension costs and pension liabilities are calculated using linear method based on assumptions about discount rates, future salary increases, pensions and social security benefits, the expected return on plan assets and actuarial assumptions on mortality, attrition, etc. Pension assets are valued at fair value and deducted from net pension liabilities balance. Changes in the obligation due to changes in pension plans are recognized over the expected average remaining service period. The same applies to estimates to the extent they exceed 10% of the greater of the benefit obligations and plan assets (corridor) (Note 14).

A change in pension plan regarding life expectancy is recognised as a correction of previous years' accounts. The comparable figures for 2013 (Balance Sheet and Cash Flow Statement) are updated and reflect this. We refer to the description in Note 14 (Pensions) and in Note 13 (Funds)

Pension schemes for employees at Representations are based on pension schemes in the countries where Norwegian Church Aid operates. If favourable, a provident fund scheme is applied.

Page 2 of 2




2014 2013 2014 2013 2014 2013 2014 2013

Norad Cooperation Agreement 136 575 137 932 1 218 3 000 10 327 17 321 148 120 158 253

Norad Special Programmes 14 334 22 302 1 139 16 15 472 22 318

Norad Embassies and Strategic Partnerships 132 136 88 019 9 615 51 141 751 88 069Norad Information Support 3 683 3 633 95 3 778 3 633

Subtotal Norad 283 045 248 253 4 901 6 633 21 176 17 388 309 122 272 273

MFA Norway 181 965 122 096 10 291 7 598 192 256 129 694MFA Embassies 64 603 39 013 5 289 4 045 69 892 43 059Subtotal MFA 246 568 161 109 0 0 15 580 11 644 262 148 172 753

FK - The Norwegian Peace Corps 2 787 5 507 2 787 5 507

BLD - The Ministry of Children, Equality and Social Inclusion 776 772 776 772

NHD - The Ministry of Trade and Industry 908 908

IN - Innovation Norway 5 263 7 222 417 5 680 7 222LNU - The Norwegian Children and Youth Council 279 15 15 279

Subtotal other Government Agencies 8 826 14 688 0 0 433 0 9 259 14 688

Total funding from Norwegian Government Agencies 538 439 424 050 4 901 6 633 37 188 29 031 580 528 459 714

NCA has a Cooperation Agreement with Norad covering the years 2011-2015. Income levels for 2015 are expected to be in line with the previous years, and a new agreement starting in 2016 will be negotiated. Each year addendums are applied for in addition to the main agreement, often related to certain embassies whose budget for development cooperation is administered by Norad. An annual report on allocated amounts and activities carried out is sent to Norad. Unused funds at year end are sought transferred to the next year where there are relevant projects that need additional financing or are repaid where the project is completed.

International cooperation

Activities in NorwayAdministrative

supportTotal

Page 1 of 1


NOTE 3 FUNDING FROM UN, ACT AND OTHER ORGANISATIONSNOTE 3 FUNDING FROM UN, ACT AND OTHER ORGANISATIONS

2014 2013

CHF - Common Humanitarian Fund for South Sudan 6,289 4,362FAO - Food and Agriculture Organization of the United Nations 589 0OCHA - United Nations Office for the Coordination of Humanitarian Affairs 8,821 4,940UNAMID - United Nations African Union Mission in Darfur 0 279UNDP - United Nations Development Programme 3,949 0UNFPA - United Nations Population Fund 776 1,743UNHCR - United Nations High Commissioner for Refugees (1,217) 0UNICEF - United Nations Children's Fund 2,677 1,342UN Logistics and Coordination Unit 1,968 0WFP - World Food Programme 1,559 1,484WHO - World Health Organisation 0 484UN - Other United Nations Agencies 0 11,944Subtotal UN - United Nation Agencies 25,411 26,578

ACT Alliance - Action by Churches Together 12,900 10,730CA - Christian Aid 5,285 5,851CoS - Church of Sweden 712 1,159DCA - DanChurchAid 14,518 15,983Diakonia Sweden 356 417FCA - Finn Church Aid 1,175 1,052ICCO - Interchurch Organisation for Development Cooperation 4,525 10,354Subtotal ACT Alliance and other ACT sister organisations 39,471 45,545

AcT - Accountability in Tanzania Programme 5,379 4,933ACT! - Act Change Transform 419 0Aids Fonds Netherlands 453 689Allan Family of Australia 2,122 2,683BMZ - Federal Ministry for Economic Cooperation and Development Germany 0 6,497British Embassy Kabul 4,141 0CAFOD - Catholic Agency for Overseas Development 2,499 3,172CARE Germany-Luxembourg 825 203Caritas Australia 1,023 1,228Caritas Austria 768 513Caritas Italy 193 242Caritas Japan 171 207Caritas Korea 282 342Caritas Luxembourg 0 1,249Caritas New Zealand 480 237Caritas Spain 579 638Caritas Switzerland 471 1,825Caritas Taiwan 269 0CRS - Catholic Relief Services 3,486 0CA - Crown Agents South Sudan 648 1,978DEVP - Development & Peace 2,011 6,444DRC - Danish Refugee Council 475 0ECHO - European Commission's Humanitarian Aid and Civil Protection Dept 2,345 4,829Embassy of The Netherlands in Bamako, Mali 1,435 0

Page 1 of 2


2014 2013ERD - Episcopal Relief & Development 486 1,861FORUT Campaign for development and solidarity 130 200HEKS - Hilfswerk der Evengelischen Kirchen Schweiz 6,484 5,280HEI - Human Education International 827 462IOCC - International Orthodox Church Charities 146 246KCF - The Kadoorie Charitable Foundation 2,403 2,283LNU - The Norwegian Children and Youth Council 292 0NFF - Football Association of Norway 75 0NKR - Christian Council of Norway 82 0NR/DNK - Norwegian Shipowners’ Association 0 241PCF - The Pestalozzi Children's Foundation 774 559Royal Danish Embassy Dar es Salaam 154 3,939NRGI - Natural Resource Governance Institute (RWI - Revenue Watch Institute) 704 588SCIAF - Scottish Catholic International Aid Fund 919 0Secours Catholique 329 1,606SIDA - Swedish International Development Cooperation Agency 4,342 8,845Statoil 3,134 306The Global Fund to Fight AIDS, Tuberculosis and Malaria 2,906 3,275Tilitonse 2,324 1,242World Vision International 219 0Other organisations (less than 50.000 NOK per donor) 66 1,140Subtotal Other organisations 57,270 69,985

Administrative support from other organisations 1,474 2,525

Total funding from other organisations 123,626 144,634

Page 2 of 2


NOTE 4 DONATIONSNOTE 4 DONATIONS

Unrestricted donations 2014 2013

Regular donors 46,432 40,670Donor letters 14,269 15,018Changemaker donations and subscriptions 429 449Web shop / alternative gifts 3,960 2,892Other donations 7,220 5,663Seasonal and remembrance gifts 980 929Individual donors 73,289 65,620

Lenten campaign 36,377 30,304Church offerings 14,180 12,925Congregations and communities 50,557 43,229

Advertisements and corporate donations 6,534 8,238Sponsor revenue 678 186Project support 1,437 1,542Private sector 8,649 9,966

Subtotal unrestricted donations 132,495 118,815

Restricted donations

South Sudan Crisis 2014 336 0Gaza Crisis 2014 881 0North Iraq Emergency Response 2014 236 0Typhoon Philippines 2013 713 12,273Syria Emergency Response 2013 1,185 1,463Draught in Sahel 2012 39 0Horn of Africa 2011 4 0Fundraising campaigns 3,394 13,737

Ethiopia, WASH, Trond Mohn Water Project 1,172 1,250Somalia, Job creation, Anti-Piracy Project 509 0Ethiopia, Food security, Samre Rural development programme 504 0Haiti, Education/Youth (WASH), Green Schools 396 682Vietnam, Building capacity on Climate Change Mitigation and Adaptation in vulnerable areas in Thua Thien Hue 389 0Vietnam, Documentation of best practices: Climate Change and Prisons 337 0Zambia, Climate, Mumbeji Climate Resilience Project 257 0Ethiopia, Water Development Project 251 107Vietnam, Mobilizing community to improve health in context of climate change 169 0Brazil, Football and citizenship 113 119Zambia, Education/Youth project in Kaluwawa area of Lukulu District 105 0Zambia, Kaluwawa Village Development Project Phase 2 0 494Malawi, Saving lives through quality health care - Christmas Campaign 103 0DR Congo, Support to Transit Centre Dorcas House 91 241Guatemala, Mayan women agriculture in Nebaj 79 0Western Sahara, Nutrition Project Phase 10 79 0Guatemala, Prevention of gender-based violence to mayan women. 63 0Malawi, Water and sanitation for the children 51 0Economic Empowerment through Renewable Energy Services 0 361Zambia, Education/Youth, Njolwe Community School 0 255Zambia, Support to Cerebral Palsy Affected Children and Families 0 250Guatemala, National and international advocacy for women's rights 0 216Economic Empowerment through Renewable Energy Services 0 213Myanmar, Promoting a Culture of Peace and Sustainability 0 100Myanmar, Assistance to Internally Displaced People in Eastern Myanmar 0 100Other project donations (less than 50.000 NOK per project) 48 545Project donations 4,716 4,933

Subtotal restricted donations 8,111 18,669

Donations from Norwegian Broadcasting Cooperation Telethon 2014 253,005 0

Testamentary donations and legacies 12,655 13,410

Total donations 406,267 150,895

Page 1 of 1


NOTE 5 INTERNATIONAL COOPERATIONNOTE 5 INTERNATIONAL COOPERATION

Region/Country 2014 2013

Eastern AfricaBurundi 13 895 9 408Democratic Republic of the Congo 33 837 21 541Eritrea 471 250Ethiopia 19 701 24 909Kenya 12 124 10 434Somalia 36 398 33 574South Sudan 64 003 34 869Sudan Khartoum 11 908 10 625Sudan Nyala (Darfur) 43 841 54 193Tanzania 21 074 22 193Regional Eastern Africa 2 192 2 712

Total Eastern Africa 259 443 224 707

Southern AfricaAngola 31 570 17 307Malawi 46 658 33 831South Africa 0 8 107Zambia 26 649 25 853Zimbabwe 0 (26)Regional Southern Africa 26 118 10 890

Total Southern Africa 130 994 95 963

West and Central AfricaLiberia (103) 16Mali 37 630 47 524Mauritania 0 978Western Sahara 4 942 3 832Regional West and Central Africa 1 093 0

Total West And Central Africa 43 562 52 350

Total Africa 434 000 373 020

Norwegian Church Aid provides emergency assistance in disasters, works for long-term development in local communities and advocates for just decisions by public authorities, business and religious leaders.

These activities can be directly implemented by NCA or in cooperation with our local partners.

Page 1 of 2


Middle EastAfghanistan 52,712 40,462Iraq 1,003 0Pakistan 22,750 16,373Palestine 25,146 25,975Syria 31,850 13,608Regional Middle East 10,104 8,089

Total Middle East 143,563 104,507

South East AsiaBangladesh 0 205India 4,561 3,151Laos 9,295 8,865Myanmar 17,573 17,275Philippines 10,895 2,224Thailand 2,841 3,350Vietnam 8,845 7,276Regional South East Asia 2,591 2,609

Total South East Asia 56,601 44,955

Total Middle East and South East Asia 200,165 149,462

Latin AmericaBrazil 10,441 13,686Cuba 678 745Dominican Republic 1,942 1,850Guatemala 7,866 7,729Haiti 26,213 34,163Nicaragua 0 138Regional Latin America 4,700 4,785

Total Latin America 51,841 63,097

Europe (excluding Norway)Armenia 550 700Romania 556 270Serbia 0 841Regional Europe 409 221

Total Europe (excluding Norway) 1,515 2,032

Norway * 26,316 31,256

Global 68,447 71,804

Total International Cooperation 782,283 690,671

* Activities in Norway include costs related to NCA's youth organisation Changemaker, the exchange programme Communication for Change, as well as the awareness raising work carried out by the regional coordinators in Norway.

Page 13 of 20



Analysis of governance costs by type of expenditure 2014 2013 NotePersonnel cost 26,868 29,424 a)Depreciation of fixed assets 2,853 3,393Fees for auditors, legal advisors and consultants 4,029 3,453Travel expenses 1,587 521IT and communication expenses 6,862 5,032Office running cost and expenses related to premises 4,945 3,200Financial expenses (2,050) 1,296 b)Other expenses (1,721) 2,814 c)Total Governance Cost 43,373 49,133

a) In addition to payroll costs this includes pension, insurance, trainings, recruitment costs and other personnel related costsb) This includes 3 MNOK unrealised currency gain on EUR and USD bank balances

Key figures and ratios according to guidelines from the Norwegian Control Committee for Fundraising

Share, governance costs 43,373 4,8 % 49,132 6,4 % 47,942 6,5 %Share, international cooperation 782,283 87,3 % 690,671 89,6 % 668,888 90,2 %Share, fundraising costs 70,557 7,9 % 30,701 4,0 % 24,499 3,3 %Total resources expensed 896,214 100,0 % 770,504 100,0 % 741,329 100,0 %

Fundraising ratio 82,6 % 79,7 % 82,5 %

The fundraising ratio shows the proprtionality between donations received and the costs of generating voluntary income.


Auditor (costs excl VAT ) 2014 2013Ordinary auditor's remuneration, Head Office 638 844Project audits, Head Office 530 702Other services and support from auditor 25 45Ordinary auditor's remuneration and project audits at Representations 2,473 1,875Total costs to auditors 3,666 3,467

c) This includes 2,3 MNOK compensation for value-added tax expenses refunded through the compensation scheme for non-profit organisations

2014 2013 2012

Page 14 of 20


NOTE 7 AUDITORS’ REMUNERATION


Analysis of governance costs by type of expenditure 2014 2013 NotePersonnel cost 26,868 29,424 a)Depreciation of fixed assets 2,853 3,393Fees for auditors, legal advisors and consultants 4,029 3,453Travel expenses 1,587 521IT and communication expenses 6,862 5,032Office running cost and expenses related to premises 4,945 3,200Financial expenses (2,050) 1,296 b)Other expenses (1,721) 2,814 c)Total Governance Cost 43,373 49,133

a) In addition to payroll costs this includes pension, insurance, trainings, recruitment costs and other personnel related costsb) This includes 3 MNOK unrealised currency gain on EUR and USD bank balances

Key figures and ratios according to guidelines from the Norwegian Control Committee for Fundraising

Share, governance costs 43,373 4,8 % 49,132 6,4 % 47,942 6,5 %Share, international cooperation 782,283 87,3 % 690,671 89,6 % 668,888 90,2 %Share, fundraising costs 70,557 7,9 % 30,701 4,0 % 24,499 3,3 %Total resources expensed 896,214 100,0 % 770,504 100,0 % 741,329 100,0 %

Fundraising ratio 82,6 % 79,7 % 82,5 %

The fundraising ratio shows the proprtionality between donations received and the costs of generating voluntary income.


Auditor (costs excl VAT ) 2014 2013Ordinary auditor's remuneration, Head Office 638 844Project audits, Head Office 530 702Other services and support from auditor 25 45Ordinary auditor's remuneration and project audits at Representations 2,473 1,875Total costs to auditors 3,666 3,467

c) This includes 2,3 MNOK compensation for value-added tax expenses refunded through the compensation scheme for non-profit organisations

2014 2013 2012

Page 14 of 20


NOTE 8 EMPLOYEE AND STAFF COSTSNOTE 8 EMPLOYEE AND STAFF COSTS

Analysis of Personnel Costs2014 2013 2014 2013 2014 2013

Wages and Salaries 81 767 70 507 123 005 95 767 204 772 166 274Social Security Costs 14 049 10 399 2 361 1 754 16 410 12 153Pension Costs 7 729 16 666 7 715 6 714 15 444 23 379Other remuneration 1 095 1 236 2 906 1 579 4 001 2 814Payroll Costs 104 640 98 807 135 987 105 813 240 627 204 621Consultants 3 098 2 482 3 974 2 111 7 072 4 593Other personnel related costs 5 162 3 974 11 811 10 747 16 973 14 721Indirect Personnel Costs 8 260 6 456 15 785 12 858 24 045 19 314Total Personnel Costs 112 900 105 263 151 771 118 671 264 671 223 934

Staff numbers by location and type of employment 31.12.2014 31.12.2013Permanent positions at Head Office 144,2 137,7 Temporary positions at Head Office * 19,0 0,6 Expatriate positions at Representations 53,0 47,0 National staff at Representations 669,0 768,0 Total number of employees 885,2 953,3

Emoluments for executive managers (General Secretary)2014 2013Wages and Salaries 940 910Pension Costs 18 18Other remuneration including travel compensation 39 64Total emoluments for executive managers (General Secretary)997 992

No fees are paid to the Board of Directors or the Board of Delegates. The General Secretary has no agreements for severance pay, bonuses etc.

* Of the increase in temporary positions, 12 positions were linked to the Secretariat of the Norwegian Broadcasting Cooperation Telethon 2014

Head office staffNational and expatriate staff at Representations

Total payroll costs all employees

Other personnel related costs include trainings and seminars, invoices from hotels, costs related to advertisements for vacant positions, canteen running cost, etcThe growth in salary expenses at Representations is partly due to the inclusion of all Darfur staff - both national support and programme staff and expatriates. In 2013, only national support staff was included. This explains approximately 6 MNOK.

In addition, an increase in the number of emergency operations (e.g. Syria and South Sudan) has contributed to the growth. Staff employed for these operations contribute to the growth in payroll costs, but since they are often employed on temporary contracts they might not appear in the head count of employees per 31.12.14 if the operation has been completed during the year. This is e.g. the case for the Phillipines operation.

Page 1 of 1


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NOTE 10 STOCKS

NOTE 11 DEBTORS31.12.2014 31.12.2013

Receivables from donors 57,266 51,222Receivables from partners 5,595 8,137Receivables from employees 925 936Prepaid expenses 10,928 8,591Deposits 624 617Accrued income (incl. Telethon) 213,766 14,908Other short-term receivables 12,571 10,410Total short-term receivables 301,675 94,820

NOTE 12 INVESTMENTS

Financial investments 31.12.2014 Cost price Market value Unrealised gain (loss)

31.12.2014 31.12.2014 31.12.2014

61,737 63,573 1,836Quoted Shares, national and international 136 136 0Hedge Funds 0 0 0Private Equity 0 0 0Investment Properties 9,306 7,331 (1,976)Total 71,180 71,040 (140)


31.12.2013 31.12.2013 31.12.2013

33,693 39,175 5,482Quoted Shares, national and international 22,972 38,335 15,363Hedge Funds 5,707 8,657 2,949Private Equity 4,063 5,401 1,338Investment Properties 9,987 10,186 200Total 76,421 101,753 25,332

Money market funds and investment funds, national and international


As per 31.12.2014 Norwegian Church Aid is in the process of transferring these financial investments from one investment company to another, which explains the temporarily low diversification of the investment portifolio.

NCA will within the ethical guidelines and the framework for proper risk management, risk diversification and liquidity seek to achieve the best return on financial investments. Investments will be made in accordance with the Board's guidelines. The investments are considered as current assets and are valued at market value as of 31.12.

Stocks are also kept at several of Norwegian Church Aid's Representations. As stated in the accounting principles, these are expensed at the time of purchase. The total value as of 31.12.2014 was 5 MNOK.

In addition, Norwegian Church Aid stores equivalent equipment at the World Food Programme's United Nation Humanitarian Response Depots (UNHRD) in the United Arab Emirates (Dubai) and in Malaysia (Subang). This equipment is not included in the registered balance amount.

Norwegian Church Aid's emergency stock contains various water and sanitation equipment ready to be dispatched on short-term notice to crisis areas. Examples of equipment are latrines, water purification, storage and distribution equipment and tents. The stock is located at Frogner, close to Gardermoen airport and contains values for 2,7 MNOK as of 31.12.2014

Page 17 of 20

NOTE 10 STOCKS

NOTE 11 DEBTORS

NOTE 10 STOCKS

NOTE 11 DEBTORS31.12.2014 31.12.2013


NOTE 12 INVESTMENTS


31.12.2014 31.12.2014 31.12.2014



31.12.2013 31.12.2013 31.12.2013









Page 17 of 20

NOTE 10 STOCKS

NOTE 11 DEBTORS31.12.2014 31.12.2013


NOTE 12 INVESTMENTS


31.12.2014 31.12.2014 31.12.2014



31.12.2013 31.12.2013 31.12.2013









Page 17 of 20

NOTE 12 INVESTMENTS


NOTE 13 FUNDS

Opening balance 01.01.14

Incoming resources

Resources expended

Closing balance 31.12.14

Unrestricted fundsFoundation capital 1) 76,633 1,588 78,221Unrestricted income funds 2) 40,486 17,059 57,545Subtotal Unrestricted funds 117,119 135,766

Funds with internally imposed restrictionsCarbon fund 1,648 0 (71) 1,577Emergency reserve 11,721 0 (2,300) 9,421Subtotal Funds with internally imposed restrictions 13,369 10,998

Funds with externally imposed restrictionsEarmarked project funds 3) 38,541 8,111 (21,996) 24,656Telethon funds 0 253,005 (33,932) 219,073Legacy income funds 1,657 162 (1,688) 131Subtotal Funds with externally imposed restrictions 40,198 243,860

Total Funds 170,685 279,925 (59,987) 390,623

Unrestricted income funds 31.12.12 25,838 Changes in pension plan 12,342 Unrestricted income funds 01.01.13 38,180 Net movement in funds 2013 2,306 Unrestricted income funds 31.12.13 40,486

Details of movements in earmarked project and campaign funds 2014:

Opening balance 01.01.14

Incoming resources

Resources expended

Closing balance 31.12.14

Operation Day's Work 2010 10,617 0 (5,278) 5,339Typhoon Philippines 11,023 713 (5,432) 6,305Haiti Earthquake 9,106 0 (4,648) 4,458Pakistan Flood 2,384 0 (2,384) 0Horn of Africa 2,008 4 0 2,013Draught in Sahel 779 39 (779) 39South Sudan Crisis 0 336 (78) 257Gaza Crisis 0 881 (866) 15North Iraq Emergency Response 0 236 0 236Syria Emergency Response 438 1,185 (192) 1,431Earmarked donations to projects (see note 4) 2,185 4,716 (2,338) 4,563Earmarked project funds 38,541 24,656

3) NCA regularly organises fundraising campaigns when a humanitarian crisis occurs. These funds are accounted for as earmarked project funds with externally imposed restrictions. As these funds are collected from a large group of donors, a reimbursement to donors of funds not used in accordance with the restrictions would not be feasible. This situation has not been relevant in the past, and is thought unlikely to occur in the future.

1) NCA - being an organisation and not a trust - does not have a legally bound foundation capital; hence the classification as unrestricted funds. The Board of Directors has in a resolution adopted guidelines for the allocation of funds to and from the Foundation capital. The balance is each year increased according to the consumer price index.

2) Changes in the pension plan regarding life expectancy is recognised as a correction of previous years' accounts and booked against unrestricted income funds. Comparative figures for 2013 are updated and reflect this. Reference is made to note 14 (Pensions) for further explanation

Page 18 of 20

NOTE 13 FUNDS


NOTE 14 ACCRUALS FOR PENSION LIABILITIESNOTE 14 ACCRUALS FOR PENSION LIABILITIES

PENSION LIABILITIES FOR EMPLOYEES IN NORWAY

Net pension expenses Insured Uninsured SumPresent value of pensions earned this year 6 040 1 285 7 325Interest expense on the pension commitment 6 901 557 7 458Return on pension funds (4 655) 0 (4 655)Estimate changes 3 192 0 3 192Social security fees 852 181 1 033Net pension expenses 12 330 2 023 14 353

Net pension commitment Insured Uninsured Insured Uninsured

Pension commitment incurred at 31.12. 149 064 12 783 133 339 9 687Estimated effect of future salary increases 23 020 2 091 30 386 2 338Estimated pension commitment 31.12. 172 084 14 874 163 725 12 025

Pension funds (at fair value) at 31.12. (122 307) 0 (108 000) 0Estimate differences/plan changes not booked (68 590) (2 525) (57 185) (1 666)Social security fees 7 019 2 097 7 857 1 696Change in pension plan regarding life expectancy, see note 13 (12 711) 369Net pension commitment (11 794) 14 446 (6 314) 12 424

Financial assumptions 2014 2013Discount rate 2,10 % 4,06 %Estimated salary increase/pension increase/social security base figure adjustment 3,10 % 4,00 %Expected return on funds 3,20 % 4,10 %Expected retirement according to AFP at 62 years old 25,00 % 25,00 %Expected retirement according to AFP at 67 years old 75,00 % 75,00 %Expected payment percentage early retirement scheme (less than 45 years old) 3,50 % 3,50 %Expected payment percentage early retirement scheme (45 to 60 years old) 0,50 % 0,50 %Expected payment percentage early retirement scheme (60 years old and older) 0,00 % 0,00 %

PENSION LIABILITIES FOR NATIONAL STAFF AT REPRESENTATIONS

2014 2013Pension liabilities for employees at Head Office 2 652 6 110Pension liabilities for national staff at Representations 23 528 14 187Total pension liabilities for Norwegian Church Aid 26 180 20 297

National staff has pension schemes in accordance with local laws and regulations or Norwegian Church Aid's guidelines for provident funds. The most favourable scheme will be applied. Norwegian Church Aid's pension schemes will normally imply that 17% of the monthly salary will be set aside on a suspended account of which the employee pays 5% and Norwegian Church Aid 12%. When the employee quits, this amount will be disbursed.

The pension schemes cover 182 active persons, 416 previously active with deferred rights and a total of 67 retired persons. The schemes give right to defined future benefits. These are mainly dependent on the number of qualifying employment years, salary level at pension age, and the amount of benefits from the National Insurance Scheme. A contractual pension scheme is included.

The pension schemes meet the requirements of the law on compulsory occupational pension and are covered through DNB.

2014

2014 2013

In 2014 there has been a change in the pension plan regarding life expectancy influencing previous years. According to guidelines from the Norwegian Accounting Standards Board this change is recognised as a correction of previous years' accounts and booked against funds/comparative figures for 2013. The adjustment has reduced the net pension commitment with NOK 12.3 mill. In the course of 2015, negotiations will be carried out and a decision will be made concerning the choice of future pension plans for Norwegian Church Aid.

Page 1 of 1


NOTE 15 BANK LOAN

NOTE 16 SHORT-TERM LIABILITIES31.12.2014 31.12.2013

Accrued, not due wages and salaries, other debt to employees 14,084 12,268Public duties payable - Representations 1,072 200Public duties payable - Norway * 8,178 6,833Accounts payable 20,992 14,838Accrued, not due expenses 10,749 8,234Accounting provision project risk 3,400 4,800Payable to donors 4,714 2,321Payable to partnes 1,584 644Other short-term liabilities 7,414 8,846Total current liabilities 72,187 58,984

Norwegian Church Aid has a long-term mortgage loan entered into in 2005 to finance the purchase of the Head Office building placed in Bernhard Getz' gate 3, Oslo. The original size was 42 MNOK, and as of 31.12.2014 the remaining principal amounts to 23,1 MNOK. 50 % of the interest are a NIBOR-regulated market-price interest and 50 % are fixed-rate. The loan has a 25-year repayment schedule. The mortgage placed as security amounts to 42 MNOK, whereas the balance sheet value of the property placed as security is 41.859.161 NOK (2013: 42.884.974 NOK).

* Included in the public duties payable in Norway are retained payroll taxes amounting to 4,2 MNOK. The amount is placed in a restricted bank account reserved for this purpose. The balance of the account is as of 31.12.2014 4,8 MNOK

Page 20 of 20

NOTE 15 BANK LOAN

NOTE 15 BANK LOAN

NOTE 16 SHORT-TERM LIABILITIES31.12.2014 31.12.2013

Accrued, not due wages and salaries, other debt to employees 14,084 12,268Public duties payable - Representations 1,072 200Public duties payable - Norway * 8,178 6,833Accounts payable 20,992 14,838Accrued, not due expenses 10,749 8,234Accounting provision project risk 3,400 4,800Payable to donors 4,714 2,321Payable to partnes 1,584 644Other short-term liabilities 7,414 8,846Total current liabilities 72,187 58,984

Norwegian Church Aid has a long-term mortgage loan entered into in 2005 to finance the purchase of the Head Office building placed in Bernhard Getz' gate 3, Oslo. The original size was 42 MNOK, and as of 31.12.2014 the remaining principal amounts to 23,1 MNOK. 50 % of the interest are a NIBOR-regulated market-price interest and 50 % are fixed-rate. The loan has a 25-year repayment schedule. The mortgage placed as security amounts to 42 MNOK, whereas the balance sheet value of the property placed as security is 41.859.161 NOK (2013: 42.884.974 NOK).

* Included in the public duties payable in Norway are retained payroll taxes amounting to 4,2 MNOK. The amount is placed in a restricted bank account reserved for this purpose. The balance of the account is as of 31.12.2014 4,8 MNOK

Page 20 of 20

NOTE 16 SHORT-TERM LIABILITIES


REPORT OF THE BOARD OF DIRECTORS, 2014

1. THE NATURE OF ACTIVITIES AND OPERATIONSNorwegian Church Aid is an ecumenical, diaconal organisation headquartered in Oslo with Representations in 21 countries.

Norwegian Church Aid works with people and organisations around the world in their struggle to eradicate poverty and injustice. We provide emergency assistance in disasters and work with long-term development in local communities. In order to address the root causes of poverty, we advocate for just decisions by public authorities, businesses and religious leaders.

Norwegian Church Aid collaborates with civil society organisations, church-based organisations and other institutions in Africa, Asia, Latin America and Europe. As of December 31st 2014, Norwegian Church Aid had 144.2 permanent and 19 temporary employees at the Head Office, compared to 137.7 permanent and 0.6 temporary employees in 2013. At the Representations, there were 53 employees on contract from Head Office at the end of 2014, compared to 47 at the same time in 2013. Local staff as of December 31st 2014 numbered 669 compared to 768 at the end of the previous year.

2. GOING-CONCERN EXPECTATION The annual accounts are based on the assumption that Norwegian Church Aid is a going-concern. This expectation is based on the forecast for 2015 and long-term strategic plans. The organisation is in a sound financial position.

3. WORKING ENVIRONMENT Norwegian Church Aid strives for diversity and promotes inclusiveness across the boundaries of religion, ethnic origin, culture, gender, age, disability, sexual orientation and political views.

Positions are established in the organisation in order to ensure the highest level of professionalism, and specialists at the Head Office work together with their counterparts at the Representations. This gives the staff an experience of working in a truly global organisation, while at the same time, reinforcing coordination across Norwegian Church Aid’s operations. Norwegian Church Aid’s technical infrastructure, such as the intranet, global accounting system, and document management system, ensures information sharing and supports our work around the world. There was a rate of 3.2% sick leave at the Head Office in 2014 compared to 2.6% in 2013.

4. ENVIRONMENTAL CONSIDERATIONSThe organisation is not engaged in production or other activity that adversely affects the Norwegian environment. One of the organisation’s goals, however, is to promote positive environmental practices at all levels of project intervention.

5. EQUAL OPPORTUNITY The gender breakdown of employees shows 62% women and 38% men at Head Office, and 40% women and 60% men at the Representations (including employees on contract from Head Office). The management team consists of 44% women and 56% men, while the breakdown by section heads shows 80% women and 20% men. The average salary is Grade 75 for women (four) and 73 for men (four) in the management team. This average does not include the Secretary General. The average salary is Grade 63.3 for women (sixteen) and 63.8 for men (four) for department leaders.


There are 87 advisors, which is the largest group of employees (position codes 1434 and 1436) followed by senior advisors (position code 1364), of whom there are 28. The average salaries are as follow: for position code 1364 the average salary grade is 61.1 (17) for women and salary grade 61.8 (11) for men, while for position codes 1434/1436 the average salary grade is 54.7 (49) for women and 54.6 (38) for men.

Norwegian Church Aid is committed to equal opportunity and equal rights for all employees, regardless of gender. We strive for gender balance at all levels, both at the Head Office and at the Representations at home and abroad. Women and men are provided the same opportunities for professional development and salary increases.

6. PROSPECTS FOR THE NEXT YEARNorwegian Church Aid continues working towards the same goals in 2015 as in 2014, but this will be the last year of our current strategy. The Board of Directors will approve a new strategy during spring 2015 effective from 2016. The main changes concern upscaling of the emergency capacity and a reinforced focus on faith-based partners. A critical tool for strengthening the humanitarian effort is to increase the capacity of the Team for Emergency response so that the organisation can respond to new humanitarian challenges in more regions simultaneously. In a sector characterized by increased demands for professionalism, competitiveness and quality become increasingly important. NCA will therefore further strengthen its work towards donors in 2015, including focusing its resources by reducing the number of Representation by approximately 20%.

7. RISK MANAGEMENT Norwegian Church Aid’s income is based on fundraising, grants from Norwegian public authorities and international donors. Its financial risks are related to donations, grants from institutional donors and Norwegian aid policy. This means that Norwegian Church Aid’s financial risks are strongly correlated with the organisation’s ability to remain a relevant and credible actor in the humanitarian sector, particularly in the eyes of the Norwegian authorities, clients, partners, media and Norwegian public opinion. In this regard, the financial risks are closely connected to the reputational risks to which the organisation is exposed.

We strive for efficiency and quality starting from the planning phase through the implementation and reporting of all our projects. Moreover, we meet – and quickly resolve – challenges associated with corruption, fraud and mismanagement by putting in place strict procedures, carrying out external audits, as well as closely following up when these instances occur.

Norwegian Church Aid is exposed to financial risk in the financial investment and currency markets. In 2014 Norwegian Church Aid prefinanced activities for several projects awaiting final approval from donors of applications submitted, totalling at peak 50 MNOK. The cash flow was covered with own unrestricted funds.

Norwegian Church Aid annually presents a report of fraud and corruption cases that the organisation has faced each year. The report titled “Norwegian Church Aid’s Anti-Corruption Report” is distributed to Norwegian authorities as well as published on Norwegian Church Aid’s website. Transparency is an important part of Norwegian Church Aids work against corruption, and also contributes to reducing the risks that fraud and corruption presents.


8. THE ACCOUNTS FOR THE YEARThe gross income in 2014 was NOK 1.1 billion; 45 per cent higher than in 2013 mainly due to the Telethon. Ninety-five per cent of costs were used to fulfil NCA’s mandate or obtain new funding. The annual accounts have been prepared in compliance with the Norwegian Accounting Act and Norwegian accounting standards for NGOs. In line with these standards, the entire income of NOK 253 million from the 2014 Telethon was recognized in the fiscal year 2014, even though the funds will be spent over a five-year period.

The annual results show a positive net result of NOK 220 million. Other unrestricted funds were strengthened by NOK 16 million to NOK 147 mill and the liquidity is good.

9. CONCLUSIONThe Board of Directors considers that the annual financial statements and accompanying notes and cash flow statement give sufficient information about operations and position at year-end. No event has occurred after year-end that is of significance in the assessment of the financial statements.

Oslo, April 27th 2015

______________________________ ______________________________ ______________________________Kjell Nordstokke

Chair

Ottar MæstadBoard member

Dag J. OpedalBoard member

Jens Aas HansenBoard member

______________________________ ______________________________ ______________________________

______________________________ ______________________________ ______________________________

______________________________ ______________________________ ______________________________

Billy TarangerBoard member

Inger M. NygårdBoard member

Brita ByeBoard member

Liv SnesrudBoard member

Anne-Marie HellandSecretary General

Sissel VartdalBoard member

Ingeborg S. MidttømmeBoard member

Hanne Sofie LindahlBoard member

Katharina R. AstingBoard member

______________________________



Documents

2014 - Kirkens Nødhjelp · short-term in nature and that there are certain risks involved in the implementation of projects, and it would therefore not be appropriate to depreciate