Medair Consolidated

Medair Consolidated 2007 Annual Financial Statements

Report on Financial Performance Mission StatementThe mission of Medair is to respond to human suffering in emergency and disaster situations by implementing multi-sectoral relief and rehabilitation projects, in a compassionate and serving attitude inspired by its Christian ethos.

Medair StrategyOur present strategy is to bring life-saving relief and rehabilitation in disasters, conflict areas, and other crises by working alongside the most vulnerable. Our strengths are in providing medical services, access to safe water and sanitation, and shelter and infrastructure construction.

Treasurer’s ReportDuring 2007, Medair was able to provide relief and rehabilitation services in eight programmes within seven countries, thanks to the generous financial support of our many donors, both institutional and individual. We closed and exited Pakistan during the year and made several surveys towards starting a new country programme in the coming year.

Our humanitarian expenditure in 2007 was US$ 25.5 million compared to US$ 22.1 million in 2006. This increase was due to significant growth in six of our country programmes.

An encouraging development is that our private donations increased significantly during this year from US$ 3.9 million to US$ 5.1 million. It is very important that we ensure this

growth continues and accelerates. Financial support from generous individuals who understand and share our values is essential to fulfilling our mission.

Administrative costs amounted to 15.5 percent of total expenditure. The increase from 2006 is due to the addition of an affiliated office in the USA, and to the growth in reporting and auditing requirements which all aid agencies face. Our overhead continues to compare very favourably in the NGO community – 84.5 percent of all incoming funds are used in field programmes to serve the beneficiaries of our programmes.

The net difference between donor receivables and donor payables increased by 44 percent. This increase reflects a continuing trend for donors to reimburse expenses incurred, rather than provide advance funds for operational contracts. This continues to put pressure on our reserves and re-enforces the need for continued growth in private funding.

I want to personally express my thanks and sincere appreciation to each member of our staff and every donor who made this year possible.

Joshua ReyTreasurer

Photo : Medair sewing project in Pakistan. © Medair

MEDAIR Consolidated 2007 Annual Financial Statements2 MEDAIR Consolidated 2007 Annual Financial Statements2

Board of TrusteesDominique Demaurex, 1998Hans Gitsels, President, 2001Clarke Gourlay, Vice-President, 2000Max Gove, Secretary, 1998Joshua Rey*, Treasurer, 2004Jonathan Tame, 1998Andrew Tanswell*, 1998Ann-Marie Wilson, 2006

Management TeamJohn Farmer, 2004Oliver Fink, 2007Jim Ingram, 2007Patrice Leguern, 2006John Rigstad, 2001David Sauter, 1994Randall Zindler, CEO, 2003

The Board of Trustees is elected from the membership of the Medair Association. There must be a minimum of five Board members, who serve for three-year terms. To ensure leadership continuity, no more than one-third of the Board can be replaced during a year.

The Chief Executive Officer (CEO) is appointed by and responsible to the Board for the management and operation of the organisation. The Management Team assists him in this responsibility.

Board of Trustee and Management Team members at 31 December 2007 are presented below. Finance Committee members are identified with an asterisk (*).

Leadership of Medair

Photo : Clean water in Madagascar. © Medair

MEDAIR Consolidated 2007 Annual Financial StatementsMEDAIR Consolidated 2007 Annual Financial Statements

Financial StatisticsPROGRAMME INCOME AND EXPENSE 2007 (USD)

7 000 000

6 000 000

5 000 000

4 000,000

3 000 000

2 000 000

1 000 000

Afghanistan DR Congo Indonesia Madagascar Pakistan Sudan(Northern

States)

Southern Sudan

Uganda

Income 1 911 650 4 497 625 2 597 396 1 180 404 1 483 833 6 150 935 6 261 011 3 099 351

Expense 1 817 639 4 506 546 2 929 340 1 191 295 1 676 459 6 179 789 6 280 816 3 335 482

Photo : Meningitis patient in Southern Sudan. © Medair

MEDAIR Consolidated 2007 Annual Financial Statements4 MEDAIR Consolidated 2007 Annual Financial Statements

PROGRAMME EXPENSE BY SECTOR

46.4% Medical Services

3.0% Construction

31.7% Water & Sanitation

2.9% Non-Food Distribution

0.6% Food Security 1.2% Rehabilitation & Development

12.8% Education0.9% Nutrition

0.5% Disaster Preparation & Mitigation

OPERATING INCOME 2007

59.7% Government EU & UN

OPERATING EXPENSE 2007

82.5% Humanitarian expense (direct)

14.0% Administration

1.5% Fundraising

2.0% Humanitarian expense (indirect)

4.5% Gifts-in-kind

0.8% Other Income17.1% Private Donations

17.9% Foundations & NGO’s

MEDAIR Consolidated 2007 Annual Financial StatementsMEDAIR Consolidated 2007 Annual Financial Statements 5


Balance Sheetas of 31 December 2007

2007 2006

Note USD USD

ASSETS

CURRENT ASSETS Cash and bank accounts 10 $ 6 506 687 $ 6 628 670 Donor receivables 11 16 341 563 15 862 842 General receivables 11 143 653 93 400 Inventory 12 18 240 43 623 Prepaid expense 13 528 369 418 957 23 538 511 23 047 492

LONG TERM ASSETS Financial assets 14 $ 105 382 $ 141 923 Fixed assets 15 1 491 601 639 047 $ - 1 596 983 $ - 780 970

TOTAL ASSETS $ - 25 135 494 $ - 23 828 462

LIABILITIES AND FUND BALANCES

CURRENT LIABILITIES Donors payable 6 $ 13 656 569 $ 14 001 246 Accounts payable 16 1 230 540 764 851 Accrued liabilities 122 843 538 879 Provisions 33 689 540 Deferred revenue 17 174 061 270 765 $ - 15 873 558 $ - 15 575 741

LONG TERM LIABILITIES Long term liabilities 18 478 875 40 052 $ - 478 875 $ - 40 052

RESTRICTED FUNDS 28 Restricted income funds 558 696 730 358 Restricted programme funds 352 959 737 518 $ - 911 655 $ - 1 467 876

UNRESTRICTED FUNDS 29 Unrestricted capital 9,29 1 415 703 1 390 638 Allocated capital 6 455 702 5 354 152 $ - $ - 7 871 404 6 744 790

TOTAL LIABILITIES AND FUND BALANCES $ - 25 135 494 $ - 23 828 462

All figures shown are in USD


Income Statement 2007

2007 2006

Note Unrestricted Restricted Total Total

INCOME 3 Donor grants 5, 19 $ - 23 202 170 23 202 170 $ 20 683 336 Private donations 19 4 072 001 1 055 859 5 127 860 3 943 326 Gifts-in-kind 20 1 346 626 1 346 626 906 635 Other income 21 184 612 60 726 245 338 324 743 OPERATING INCOME $ 4 256 613 25 665 380 29 921 993 $ 25 858 040 EXPENSE 3 Humanitarian expense 22 $ -25 548 958 -25 548 958 $ -22 081 485 Administrative expense 23 -4 686 525 -4 686 525 -3 790 494 OPERATING EXPENSE 26 $ -30 235 483 - -30 235 483 $ -25 871 979 RESULT FROM OPERATIONS $ -25 978 870 25 665 380 -313 490 $ -13 939

Financial income $ 14 581 14 581 $ 6 984 Financial expense -33 050 -33 050 -5 433 Realised gain on exchange 9, 24 350 762 479 351 241 174 030 Unrealised gain on exchange 9 520 499 520 499 821 687 852 792 479 853 271 997 268 NET RESULT $ -25 126 078 25 665 859 539 781 $ 983 329 FUND MOVEMENTS DURING THE YEAR 3 Restricted funds income $ - 27 392 416 27 392 416 $ 24 799 783 Restricted funds expense -27 960 425 -27 960 425 -24 236 181 Unrestricted funds income 5 061 601 5 061 601 3 330 457 Unrestricted funds expense -3 953 813 -3 953 813 -2 910 730 $ -26 852 637 27 392 416 539 781 $ 983 329

ALLOCATION OF NET RESULT 3 Restricted funds $ - -568 009 -568 009 $ 563 602 Unrestricted funds 1 107 790 1 107 790 419 727 $ 1 107 790 -568 009 539 781 $ 983 329 RESULT AFTER ALLOCATION $ -27 960 425 27 960 425 - $ -



Cash Flow Statement 2007

2007 2006

CASH FLOW FROM OPERATIONS Net result before allocation $ 539 781 $ 983 329 Depreciation 15 580 787 485 661 (Increase)/decrease in donor receivables 11 -478 720 -8 312 547 (Increase)/decrease in general receivables 11 -50 253 55 780 (Increase)/decrease in inventory 12 25 383 -14 023 (Increase)/decrease in prepaid expense -109 412 5 381 Increase/(decrease) in donors payable 6 -344 677 7 876 390 Increase/(decrease) in accounts payable 16 465 689 -639 620 Increase/(decrease) in accrued liabilities -416 036 339 009 Increase/(decrease) in provisions 33 689 540 - Increase/(decrease) in deferred revenue 17 -96 704 -109 315 Increase/(decrease) in long term liabilities 18 438 822 -13 757 Unrealised gain/(loss) on exchange 30 109 31 229 $ 1 274 310 $ 687 517 CASH FLOW FROM INVESTING ACTIVITIES (Investments)/disposals in financial assets 14 $ 36 541 $ -10 564 (Investments) in fixed assets 15 -1 482 941 -430 274 Disposals in fixed assets 15 50 105 71 174 $ -1 396 295 $ -369 664 CASH FLOW FROM FINANCING ACTIVITIES 0 0 TOTAL MOVEMENT IN CASH $ -121 984 $ 317 853 CHANGE IN CASH BALANCES 10 Opening balance $ 6 628 670 $ 6 310 817 Closing balance 6 506 687 6 628 670

DECREASE IN CASH $ -121 984 $ 317 853

NoteAll figures shown are in USD


2007

Opening Unrestricted Restricted Programme Financial Fund Closing Note Balance Income Income Expense Gain/(Loss) Transfers Balance

RESTRICTED FUNDS 27

Restricted income funds 28

Africa fund $ 13 129 $ 1 443 240 $ 59 670 $ -1 516 039 $ -

Emergency response fund 453 219 19 880 -45 799 -339 -1 320 425 641

Forgotten victims fund 13 980 786 682 -263 15 185

Medical fund 72 238 2 911 -2 752 -571 71 826

Peace & reconciliation fund 1 -1 -0

Tsunami fund 125 781 0 10 -125 200 592

Water fund 51 485 39 812 -30 134 1 142 -20 000 42 306

Private activity fund 525 525

Cumulative currency translation 2 622

$ 730 358 $ - $ 1 506 630 $ -78 685 $ 60 594 $ -1 662 823 $ 558 696

Restricted programme funds 28

Afghanistan $ 13 132 $ 1 586 683 $ -1 817 639 $ 2 315 $ 322 652 $ 107 142

Angola 4 502 -21 677 -2 887 229 18 953 -880

Bangladesh

Chechnya

DR Congo 27 331 3 913 004 -4 506 546 16 088 568 534 18 410

Indonesia 14 739 2 238 810 -2 929 340 9 493 349 094 -317 204

Iran 6 915 12 -1 392 5 536

Iraq 4 375 379

Liberia

Madagascar 59 248 963 703 -1 191 295 3 547 213 154 48 356

Mozambique - 1 293 -2 587 -25 -1 319

Pakistan 224 924 1 484 267 - 1 676 459 -434 32 298

Somalia 21 569 -32 672 76 623 65 521

Sri Lanka -1 769 356 1 474 61

Sudan - Northern States 337 327 5 799 960 -6 179 789 -16 845 367 819 308 472

Sudan - Southern Sudan 23 787 5 396 590 -6 280 816 -720 865 142 3 984

Uganda 22 766 2 747 635 -3 335 482 567 632 940 68 426

Zimbabwe 4 612 4 612


$ 737 518 $ - $ 24 132 224 $ -27 956 549 $ 14 215 $ 3 416 385 $ 352 959

TOTAL RESTRICTED FUNDS $ 1 467 876 $ - $ 25 638 853 $ -28 035 234 $ 74 809 $ 1 753 563 $ 911 655

UNRESTRICTED FUNDS 29

Unrestricted capital Undesignated funds $ 1 390 638 $ 3 997 704 $ 526 859 $ -4 504 505 $ 1 410 696

Cumulative currency translation 9,29 5 007

Undesignated funds $ 1 390 638 $ 3 997 704 $ - $ - $ 526 859 $ -4 504 505 $ 1 415 703

Allocated capital

Administrative fund $ 499 233 $ 258 909 $ 8 973 $ -2 200 251 (a) $ 251 582 $ 1 925 211 $ 743 658

Capital Equipment fund 832 755 832 755

Operations fund 4 793 058 1 028 20 4 794 106

Training fund 61 860 16 526 -7 023 71 363


$ 5 354 152 $ 258 909 $ 26 527 $ -2 200 251 $ 251 602 $ 2 750 942 $ 6 455 702

TOTAL UNRESTRICTED FUNDS $ 6 744 790 $ 4 256 613 $ 26 527 $ -2 200 251 $ 778 461 $ -1 753 563 $ 7 871 404

TOTAL CHANGES IN CAPITAL $ 8 212 665 $ 4 256 613 $ 25 665 380 $ -30 235 483 $ 853 271 $ -0 $ 8 783 060

Note: (a) This is a net number after the field contribution in support of administrative costs.

Statement of Changes in Capital 2007



Notes to consolidated financial statements for 2007Presentation1. Medair is a private, non-profit and non-governmental

organisation that brings life-saving relief and rehabilitation in disasters, conflict areas, and other crises by working alongside the most vulnerable. Medair was founded in 1989 and is established as an association under article 60 and following of the Swiss Civil Code. Medair is independent of any political, economic, social, or religious authority.

Accounting principles2. Scope of consolidation

These financial statements present the consolidated activities of Medair affiliated offices worldwide. The international headquarters of Medair are located in Ecublens, Switzerland.

MedairChemin du Croset 91024 EcublensSwitzerland

Five affiliate offices and one Swiss foundation are consolidated into these financial statements. Each affiliate office is an independent entity with a distinct Board of Trustees, but agrees to support the work of Medair worldwide. Medair Invest-in-Aid is an independent

Swiss foundation that promotes long-term financial development and endowment income for Medair.

Medair e.V. (Deutschland) Köhlerstrasse 382110 GermeringGermany

Medair France1, Rue George Bizet26000 ValenceFrance

Medair UKUnit 3, Taylors Yard67 Alderbrook RoadLondon SW12 8ADUnited Kingdom

Stichting Medair NederlandAmsterdamseweg 163812 RS AmersfoortThe Netherlands

Medair Invest-In-AidChemin du Croset 9CH-1024 EcublensSwitzerland

Medair USPO Box 4476Wheaton, IL 60189United States of America

In addition, these financial statements incorporate the income and expenses for all humanitarian programmes at field locations. While some of these programmes may be in countries where there is a legally registered Medair office, operational control (including the power to govern the operating and financial policies of the programmes) is maintained through the international headquarters in Switzerland.

Photo : Medair truck headed to remote area of Madagascar. © Medair


3. Principles of financial statement preparationThe financial statements have been prepared in accordance with all the standards of Swiss GAAP RPC, except those which do not apply to Medair such as RPC 14 (insurance companies) and RPC 26 (pension funds). The financial statements present a true and fair view of Medair activities and financial situation. These principles require management to make informed judgments, best estimates, and assumptions that may affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.

Medair uses the fund accounting method in which all revenues and expenses are assigned to a specific fund. Revenues are recorded as restricted or unrestricted depending on donor designation. All expenses are considered unrestricted. The net result of current year activities is allocated to fund balances at the close of the fiscal year.

These financial statements have been prepared using the historical cost convention. The accrual method of accounting has been used for revenue and administrative expenses incurred in Switzerland and the affiliate offices. The cash basis of accounting is in use at field locations for local revenue and programme expenses. All amounts are expressed in US dollars.

4. Changes in presentation of accounts since 2006The Swiss GAAP standard on valuation, RPC 2, now requires that all unrealised foreign exchange gains and losses be recognised in the result of the period. Accordingly, we have restated the 2006 financial statements for comparative purposes to reflect this change of standard.

Previously, any non-contractual or supplemental gifts-in-kind received in the course of our activities during the year had been removed from the presentation of the accounts. This has changed and they are now incorporated into the presentation of the accounts.

5. Recognition of grant revenueGrant revenue is presented as constructively earned according to the percent of completion method (POCM). The portion of a grant constructively earned is determined by calculating actual project expense to the total project budget at end of year. There are no material cost overruns on project budgets at year end 2007.

6. Deferred revenue on donor grantsDonor grant contracts often extend beyond the current fiscal year. The table below presents the deferral amount for each country programme. At year end, total donor receivables were US$ 16,341,563 with a deferred revenue amount of US$ 13,656,569. Deferred revenue is presented on the balance sheet as a payable to the donor.

USD 2007 2006Afghanistan -1 882 952 -1 057 008

Africa 0 -1 443 240

Angola 0 0

DR Congo -3 999 547 -3 641 089

Indonesia -1 255 529 -3 760 456

Madagascar -1 986 873 0

Pakistan 0 -1 368 478

Sudan, Northern States -2 153 553 -1 619 611

Sudan, Southern Sudan -1 446 008 -513 834

Uganda -932 107 -597 530

TOTAL -13 656 569 -14 001 246

7. Treatment of inter-company transactionsAll inter-company transactions have been eliminated from these financial statements. Inter-company transactions consist of donor grants, restricted and unrestricted donations, accounts receivable, and accounts payable. Humanitarian grants from governmental donors have been signed by Medair UK and then transferred to Medair (Switzerland) for implementation. These grants have been removed from the revenue and accounts payable figures of Medair UK.

8. Functional currency and foreign currency translationMedair (Switzerland) maintains its accounts in US dollars. European affiliate offices record their accounts in local currency. In addition, Medair UK maintains a financial ledger in euro to account for donor grant activity from the European Commission. All affiliate office accounts have been converted into US dollars at the average annual rates for the income statement and at the closing rates for the presentation of the balance sheet.

2007 2006Closing exchange rate CHF / USD 0.88840 0.82050

Average exchange rate CHF / USD 0.83424 0.79856

Closing exchange rate EUR / USD 1.47290 1.32030

Average exchange rate EUR / USD 1.37074 1.25622

Closing exchange rate GBP / USD 1.99730 1.95910

Average exchange rate GBP / USD 2.00181 1.84295


Transactions that occur in local currencies on the field are converted into our base currency using the temporal method, as if they had occurred in US dollars.

9. Treatment of exchange gains and lossesMedair uses the current rate method of reporting currency translations. Currency translations that arise from bringing affiliate office or the foundation accounts in local currency into US dollar base currency are taken to the balance sheet as either restricted or unrestricted capital. This fund is the cumulative currency translation adjustment.

Unrealised gains and losses, including the revaluation of balance sheet items, are reported on the income statement in accordance with RPC 2. This represents a change from prior years and as a result the financials for 2006 have been restated for the prior year comparison with 2007.

All realised exchange gains and losses from operating activities are reported on the income statement. Exchange differences on inter-company transactions have been recorded to the income statement as realised gains and losses to either restricted or unrestricted income, depending on the source at the affiliate office.

Notes to the Balance sheet 10. Cash and bank accounts

Cash accounts consist primarily of currency accounts in field locations. Bank accounts include accounts at both field locations and for the administrative offices.

11. Receivables Receivables consist of donor grants, general receivables, and Medair debtors. Donor receivables are recorded when grant contracts are signed. It is reasonable to expect that Medair will conform to the stipulations of Photo : Clean water source in Uganda. © Medair


the grant contracts, after which collection is reasonably assured. Medair debtors consist of staff receivables and the Medair Staff Assistance Foundation (MSAF).

Receivables (USD) 2007 2006Governmental donors 12 901 686 11 477 745

NGO & institutional donors 2 119 748 2 346 069

United Nations organisations 1 320 130 2 039 028

Donor receivables 16 341 563 15 862 842

General debtors 103 769 43 335

Medair debtors 39 882 50 065

General receivables 143 652 93 400

Total 16 485 215 15 956 242

12. InventoryInventory consists of material and supplies located in Switzerland and used in field programmes. Stock is recorded to inventory when purchased and is valued at purchase cost. The First In First Out method is applied to

expended items. Inventory items are used exclusively for field programmes and are not for commercial resale.

13. Prepaid expensesPrepaid expenses consist of rent payments in advance on the field, flight payments in advance on the field, occupational pension premiums, insurance premiums against data loss, theft, accidents, salary in case of illness, and annual software maintenance.

14. Financial assetsThese assets consist of blocked deposit accounts and capital deposits in Medair Staff Assistance Foundation (MSAF). There is no reported revenue from this foundation.

15. Fixed assetsFixed assets are Medair capital assets in use at the international headquarters in Switzerland or in the performance of its humanitarian activities. All capital assets at field locations are considered restricted. Medair assets are recorded at cost of acquisition.

USD Total Assets Accumulated Depreciation Total

Asset GroupOpening

Book Value

Opening balance

2007 Additions

2007 Disposals

Closing Balance

Opening Balance

2007 Disposals

2007 Depr

Closing Balance

Currency translation

Closing Book Value

Office 91 489 136 833 74 861 -54 372 157 322 -45 345 3 731 -32 381 -73 994 -12 83 316

Computer 134 151 541 911 121 040 -15 793 647 158 -407 760 13 697 -105 591 -499 654 490 147 994

Software 7 991 76 836 640 027 -21 809 695 054 -68 845 20 459 -77 945 -126 332 -11 568 711

Communication 44 674 139 746 68 530 -14 597 193 679 -95 072 12 002 -44 530 -127 599 66 080

Energy 14 525 36 256 47 515 -10 295 73 476 -21 731 10 295 -25 429 -36 865 36 611

Furniture & Fixture 1 773 18 554 6 000 0 24 553 -16 781 0 -644 -17 425 34 7 162

Leasehold 12 917 22 081 12 713 0 34 794 -9 164 0 -4 886 -14 050 20 744

Tools & Equipment 0 0 5 796 0 5 796 0 0 0 0 5 796

Vehicles 331 528 904 736 506 459 -1 621 1 409 574 -573 209 8 197 -289 381 -854 391 555 183

TOTAL 639 047 1 876 953 1 482 941 -118 488 3 241 406 -1 237 906 68 383 -580 787 -1 750 310 500 1 491 601

DepreciationStraight line depreciation expense is calculated based on the expected useful life of the capital asset category. Depreciation charges begin in the month after purchase.

The value of capital assets is assessed at closing. If there is an indication of impairment where the remaining value of the capital asset is less than its stated book value, an impairment loss is recognised immediately in the income statement.

Office equipment 3 years

Computer equipment 3 years

Software 3 years

Communication equipment 1.5 to 4 years

Energy equipment 2 to 3 years

Furniture & fixtures 5 years

Leasehold improvements 5 years

Vehicles 2 to 3 years


16. Donors payable and accounts payableAccounts payable consist of unearned grant balances due to donors, vendor payables, statutory payables, Medair staff payables, and the current portion of the loan from Microsoft Financing. Refer to notes five and six on the treatment of grants from institutional donors. Payables of US$ 38,731 to Medair staff and the Medair Staff Assistance Foundation (MSAF) are included in the total. Payables of US$ 226,092, the current portion of the long-term loan, is also included in the total.

17. Deferred revenueThis is a restricted grant that has been given for a specific purpose. Revenue from restricted grants is recognised in the period in which the related expenditures are incurred. A portion of the grant was expensed during 2007.

18. Long-term liabilitiesThese liabilities consist of contract termination benefits for national staff in our field programmes and a loan from Microsoft Financing for the purchase of new software.

Notes to the Income Statement 19. Recognition of revenue

Refer to notes five and six on the treatment of grants from institutional donors. Local grants that are negotiated and signed at field level are recorded on the cash basis. Private donations are recorded as revenue when received and split into restricted or unrestricted according to donor designations. Pledges are not treated as revenue.

Medair segments its operations geographically, by country. The following table presents comparative revenue figures by country.

USD Total Revenue

2007 2006Afghanistan 1 911 650 2 113 534

Angola -2 495 1 212 101

DR Congo 4 497 625 5 374 063

Indonesia 2 597 397 915 115

Iran 12 130

Iraq 375 -4

Madagascar 1 180 404 478 917

Mozambique 1 268

Pakistan 1 483 833 1 857 289

Somalia 98 193

Sri Lanka 1 474 142

Sudan, Northern States 6 150 934 5 243 495

Sudan, Southern Sudan 6 261 012 4 856 034

Uganda 3 381 142 2 741 465

Zimbabwe 0 4 612

Switzerland 1 210 621 649 009

France 245 020 180 028

Germany 13 251 13 058

Netherlands 123 509 66 341

United Kingdom 528 108 150 716

USA 235 739

IIAID 2 920 1 996

Total 29 921 993 25 858 040

20. Gifts-in-kindGifts-in-kind are an integral part of Medair’s humanitarian programme. They are provided either through donor contracts or non-contractual donations for distribution to beneficiaries of our projects. Medair is fully responsible for the receipt, storage, transportation, accounting, and distribution of these materials. Gifts-in-kind received either under contract or supplemental from a donor are recorded as income and expense in our accounts. The total breakdown of gift-in-kind activity is presented below.

USD 2007 2006

Contractual Supplemental Contractual SupplementalAfghanistan 4 429 65 176 161 076

Angola 99 342

DR Congo 282 212 205 253

Indonesia 77 015

Madagascar 23 164

Pakistan 678 349

Sudan, Northern States 308 285 114 272 273 652 125 671

Sudan, Southern Sudan 138 222 304 380 167 312

Uganda 23 422 6 050 94 998

Total 779 734 566 893 906 635 899 018


21. Other incomeOther income consists of sales income, training fees for our Relief and Rehabilitation Orientation Course (ROC), beneficiary participation in field programmes, and miscellaneous income.

22. Humanitarian expenseHumanitarian expense is the total cost of providing goods and services to Medair’s beneficiaries. It includes the costs of implementing these humanitarian programmes, such as project staff, food, and living costs, communication and energy equipment, vehicles, transportation and storage of materials, and logistical and financial expenses.

Programme expense is the total humanitarian cost plus a contribution to indirect cost. The budget of each humanitarian programme includes a 10 percent contribution to support the administrative costs of Medair. This cost is not reported with humanitarian expense, but is included in the term programme expense in the Statement of Changes in Capital.

23. Administrative expenseAdministrative expense includes the cost of the Medair office in Ecublens, Switzerland plus the administrative costs of each of the affiliate offices and the Invest-in-Aid

foundation. This cost consists of personnel, marketing, fundraising, financial, and administrative expenses.

24. Realised gain on exchangeThis is the net result of realised gains and losses, which is recorded to the income statement.

25. Cost of fund appealsMedair (Switzerland) ran nine fundraising campaigns during 2007, the results of which are presented below. Results are based on revenue received within 60 days after reception. The results of fundraising campaigns in our European affiliate offices were not similarly tracked in 2007 and therefore cannot be presented.

USD 2007 2006Number of campaigns 9 10

Total cost 280 485 324 915

Total revenue 550 719 495 491

26. Organisational expensesThese expense categories are presented for information only. They present a functional breakdown of operating expenses rather than the activity based presentation of the financial accounts.

USD PersonnelTravel &

representationAdmin Maintenance Fundraising Depreciation

Other

expense

Total

operating

expense

Afghanistan 701 778 54 978 112 023 80 086 0 10 410 698 400 1 657 676

Angola 0 9 1 834 0 0 0 1 045 2 887

DR Congo 764 360 79 725 172 942 109 526 0 6 556 2 928 297 4 061 406

Indonesia 773 323 80 826 97 586 22 929 0 25 955 1 697 629 2 698 248

Iran 71 793 0 0 0 0 528 1 392

Madagascar 278 287 55 939 42 127 30 347 0 1 117 675 235 1 083 052

Mozambique 0 0 0 0 0 0 2 587 2 587

Pakistan 158 057 13 352 22 530 4 807 0 177 1 325 129 1 524 051

Somalia 10 005 10 339 1 113 0 0 0 11 214 32 672

Sri Lanka 0 0 0 0 0 0 -356 -356

Sudan, Northern States 1 748 916 169 978 318 045 198 786 0 83 618 3 109 041 5 628 383

Sudan, Southern Sudan 1 935 239 442 109 307 184 179 070 0 81 900 2 801 213 5 746 717

Uganda 914 459 86 046 191 569 101 141 0 249 951 1 488 391 3 031 557

Sector activity 25 037 27 057 2 425 373 0 0 23 793 78 685

Humanitarian subtotal 7 309 532 1 021 151 1 269 379 727 066 0 459 684 14 762 146 25 548 958

Switzerland 2 323 901 216 594 393 074 129 956 418 661 110 891 484 616 4 077 693


Notes to the Statement of Changes in Capital27. Presentation of fund balances

Revenues and expenses from the Swiss accounts, including field office transactions, are presented in US dollars. Current year revenues and expenses per fund from the affiliated offices and the foundation are converted at average annual exchange rates from local currency. The difference between a calculated fund balance (opening balance plus revenues minus expenses) and a converted fund balance at closing exchange rate is taken to the cumulative currency translation line within the appropriate fund section.

28. Restricted fundsRestricted funds consist of restricted income funds and restricted programme funds. They are used according to the designation of the donor. In the unlikely event that the Board of Trustees needs to redirect the funds or change the purpose of a restricted fund, the prior approval of affected donors will be sought.

Restricted income fundsRestricted income funds are solicited from private donors for a specific cause. They are used to augment programme funds in certain humanitarian operations. They may also be used for organisational capacity building, such as training courses, relevant materials, conducting staff workshops, etc. Allocation of these funds to specific programmes is at the discretion of the Management Team.

Africa fund Restricted to programme activity in Africa. This fund receives an annual block grant from the Swiss government, which is reallocated to country restricted programme funds.

Emergency response This fund facilitates immediate intervention in the event of a new or developing humanitarian emergency.

Forgotten victims Restricted to programmes that work with vulnerable or displaced persons.

Medical fund Restricted to programmes with medical or health related activities.

Peace & reconciliation Restricted to humanitarian work in areas of war or civil unrest, including psycho- social programmes.

Tsunami fund Restricted to programmes that are related to the aftermath of the Tsunami of December 2004.

Water fund Restricted to programmes related directly to water and sanitation activities.

Private activity Funds raised by expatriate staff members for special projects.

Restricted programme fundsProgramme funds are the current liabilities for unfinished humanitarian programmes at year end. They consist of unspent local grants and private donations given in support of a specific humanitarian operation. A restricted programme fund is maintained for each country in which Medair operates.

29. Unrestricted fundsThese funds are the general reserves of Medair. They consist of unrestricted capital and allocated funds, which facilitate operational management. Use of these funds is at the discretion of the Management Team.

USD PersonnelTravel &

representationAdmin Maintenance Fundraising Depreciation

Other

expense

Total

operating

expense

Medair France 136 748 10 505 26 144 278 21 462 840 1 195 979

Medair Germany 652 0 270 0 4 900 319 0 6 141

Medair Netherlands 50 416 3 730 30 680 0 12 518 678 0 98 022

Medair UK 118 111 3 071 55 986 0 25 321 7 887 0 210 376

Medair USA 71 553 11 904 10 942 2 521 488 97 408

Invest in Aid 908 908

Administrative subtotal 2 701 381 245 804 518 005 130 234 485 383 121 103 484 617 4 686 527

TOTAL 10 010 913 1 266 955 1 787 384 857 300 485 383 580 787 15 246 763 30 235 483


Unrestricted capital

Undesignated funds Private donations that are not designated to a specific programme or cause by the donor.

Cumulative currency translation

The accumulated effect of unrealised currency translations.

Allocated capital

Administrative fund Used for the general administrative costs of the organisation.

Capital Equipment fund Used for the purchase of Medair owned assets. See Note 14.

Operations fund Used to support the cash flow requirements of field projects.

Training fund For the professional development of Medair staff members.

30. Movements between fundsThe purpose of fund transfers is to augment institutional donor funds in the outworking of humanitarian programmes on the field. Institutional donors will often require co-funding of projects with revenue from other sources. The table below presents the fund transfers made during 2007.

USD SOURCE FUND

Receiving fund Africa fundPeace &

reconcilia-tion fund

Tsunami fund

Sri LankaEmergency

fund

Forgotten Victims

fundWater fund

Undesig-nated funds

Training fund

TOTAL

Emergency response fund 0

Forgotten victims fund 1 1

Tsunami fund 148 16 093 16 241

Afghanistan 264 320 328 2 060 322 652

Angola 18 953 18 953

DR Congo 250 000 317 198 1 336 568 534

Indonesia 139 819 209 276 349 095

Iran 0

Madagascar 150 000 20 000 43 154 213 154

Somalia 32 672 43 951 76 623

Sri Lanka 1 622 1 622

Sudan - Northern States 367 819 367 819

Sudan - Southern Sudan 433 757 1 320 429 607 458 865 142

Uganda 281 791 351 149 632 940

Capital Equipment fund 832 755 832 755

Administrative fund 1 922 041 3 170 1 925 211

TOTAL 1 516 039 1 141 441 148 1 320 264 20 000 4 504 505 7 024

Other information31. Remuneration of the Board of Trustees

Members of the Board of Trustees of Medair (Switzerland) and the respective boards of each European affiliate office volunteered their time in 2007, receiving neither salary nor indemnity. Board members are allowed to submit travel expenses for reimbursement.

32. Contingent liabilityIn May 2007, Medair received the results of an audit conducted in January by the Humanitarian Aid Department of the European Commission (ECHO). This donor audit resulted in a potential liability of € 377,494. In January 2004, a new Framework Partnership Agreement


(FPA) came into effect between Medair UK and ECHO. This FPA contained expanded procurement requirements, which were further clarified during 2005. This audit covered the period from 2002 to 2004 and therefore included some projects that were subject to these new procurement procedures. The expense justification requirements under this new FPA were changed to require additional documents, which Medair did not have readily available.

Medair has disputed this audit reclaim. As a result of ongoing negotiations, ECHO has lowered this potential liability to € 167,186. Medair has subsequently raised an audit provision for € 128,685 for our expected audit reclaim leaving € 38,501 still under negotiation. Medair expects this to be significantly reduced in the subsequent negotiations.

In March 2008, Medair received the results of an evaluation on work done for our country programme in Indonesia during 2007. This evaluation showed that the quality of the work done on one specific project was sub-standard. As a result, remediation work will have to be done and our current estimate of this work is US$ 825,000. Medair anticipates that a significant portion of this will be covered by external donors. Medair has raised a provision of US$ 500,000 for remedial construction work. This leaves a remaining potential additional liability of US$ 325,000.

33. ProvisionsMedair has raised two provisions in 2007: the first amount of US$ 189,540 (€ 128,685) for the ECHO audit reclaim and the second amount of US$ 500,000 for the Indonesia remedial construction work.

USD 2007 2006Opening Balance 0 0

Additions 689 540

Disposals

Closing Balance 689 540 0

34. Pension planMedair’s employees in Switzerland are insured against the economic consequences of old age, invalidity and death, according to the provision of the Federal Law for occupational benefits, old age, and survivors (LPP), by Winterthur – Columna Fondation LPP. According to the defined contribution plan covered by the collective foundation, the employees and the employer pay determined contributions. With this plan, net returns on

plan assets do not influence contributions and the final provision is not guaranteed. Risks are supported by the collective foundation; no information about economic benefits or economic liability is available.

The annual contributions to the pension plan are recorded to the income statement during the period to which they relate.

CHF 2007 2006Vested benefits 1 104 481 1 122 266

Premiums paid 244 820 211 208

Number of insureds 52 49

Expatriate volunteers do not benefit from the pension plan, although Swiss expatriates who have retained their Swiss domicile are insured by Winterthur – Columna Fondation LPP. In 2007 and 2006, two Swiss expatriates were covered by the plan.

The employees of each affiliate European office benefit from the pension plan related to a state insurance company. Medair does not maintain an independent pension plan for the affiliate offices.

35. Income taxMedair is exempt from Swiss income tax according to a decision from the Departement des Finances, Canton de Vaud, dated 19 March 1992.

36. InsuranceMedair (Switzerland) maintains fire insurance on furniture and equipment in the amount of CHF 957,935.

37. Links to associated organisationsMedair Staff Assistance Foundation (MSAF) is an independent Swiss foundation that assists expatriate staff with medical expenses, health insurance, and repatriation on behalf of Medair. The financial accounts of this foundation are not included in these consolidated accounts, as the net impact on the financial statements is immaterial.

38. There have not been any significant events post closure that impact these financials statements for the year 2007.

39. Annual Report copiesCopies of the 2007 Swiss statutory annual report and the 2007 consolidated annual report are available upon written request to the Medair offices at Chemin du Croset 9, 1024 Ecublens, Switzerland.


www.medair.org

Photos, front cover: Medair vaccination campaign in D.R. Congo (Personal information changed on card). © Medair/M. Frey

back cover: Medair clinic in Afghanistan. © Medair

Medair International HQ

Chemin du Croset 9

CH-1024 Ecublens

Switzerland

Tel: +41 (0) 21 694 35 35

[email protected]

Medair France

1 rue Bizet

26000 Valence

France

Tel: +33 (0) 475 59 88 28

[email protected]

Medair Germany

Köhlerstr. 3

82110 Germering

Germany

Tel: +49 (0) 89 82 00 09 73

[email protected]

Medair Netherlands

Amsterdamseweg 16

3812 RS Amersfoort

The Netherlands

Tel: +31 (0) 87 874 11 10

[email protected]

Medair Switzerland

Chemin du Croset 9

CH-1024 Ecublens

Switzerland

Tel: +41 (0) 21 695 35 00

[email protected]

Medair UK

Unit 3, Taylors Yard

67 Alderbrook Road

London, SW12 8AD, UK

Tel: +44 (0) 20 8772 0100

[email protected]

Medair US

PO Box 4476

Wheaton, IL 60189

United States of America

Toll Free 1-866-599-1795

[email protected] Registered in England & Wales No. 1056731Company Registered in England and Wales No. 3213889

Documents

Medair Consolidated