Financial Statements

�

Contents

1 Financial Statements �007 MSF-Holland Association 3

Statement of expenditure and income for �007 5

Balance sheet as at 31 December �007 7

Cash flow statement for �007 8

2 Explanation statement of expenses and income in �007 11

3 Explanation of the Balance Sheet 31

4 Accounting Principles 41

5 Associated parties Médecins Sans Frontières 45

6 Long-term forecast 51

7 Other 55

3

msf-holland assoCiationThe 2007 Annual Financial Statements include the fi nancial information of theassociationMSF-Holland in Amsterdam.

The association was founded in 1984. The objective of the organisation is: “The organisation of practical medical aid to people in disaster areas and crises world-wide, in accordance with the principles expressed in the Charter. Based on its medical work, the association will also make every effort towards effective advocacy on behalf of the section of the population that it aids.”

MSF-Holland is part of the international network organisation of Médecins Sans Frontières, in which nineteen national organisations are active and of which fi ve carry out projects independently. Every national organisation is an independent economic and legal entity. All sections are united in the Swiss based association “Association Bureau Médecins Sans Frontières International”. In view of the fact that international collaboration is increasingly leading to a greater interdependancy, this fi nancial report includes a paragraph called “associated parties”. This paragraph focuses on the mutual agreements resulting in the related fi nancial fl ows, agreements on governance and the associated risks. Whenever possible, in these fi nancial statements the fi nancial fl ows within the MSF-network are mentioned explicitly. The Charter and more comprehensive information about the organisation are published on the website of MSF-Holland (www.artsenzondergrenzen.nl) and in the Annual Report of MSF-Holland. In the Annual Report a summary explanation of the fi nancial statements is included. The Annual Report is published on the website.

The association MSF-Holland is registered with the Amsterdam Chamber of Commerce under number 41215974. The association MSF-Holland is a member of the Association of Fundraising Institutions (VFI) and is certifi ed by the Central Bureau for Fundraising (CBF). The conditions for CBF certifi cations can be consulted on www.cbf.nl.

guidelinesThe fi nancial statements have been prepared in accordance with revised Guideline650fortheReporting of Fundraising Institutions, as published by the Dutch Accounting Standards Board (Raad voor de Jaarverslaggeving). The purpose of the Guideline is to provide insight in

fundraising and the realised expenditure of funds on the objectives for which the funds were raised.

In various parts of the fi nancial report, reference is made to the guidelines and recommendations of the Association of Fundraising Institutions (VFI). These guidelines can be consulted on www.vfi .nl.

Changes in aCCounting prinCiplesIn 2007 a revised Guideline 650 for the Reporting of Fundraising Institutions was adopted by the Dutch Accounting Standards Board. The revised guideline must be applied in the 2008 fi nancial year. The association MSF-Holland has decided to present its fi nancial report for 2007 according to this revised guideline. The comparative fi gures for 2006 have been adapted to the requirements of the revised guideline. For MSF-Holland, the revised Guideline 650 does not affect the size and composition of the net assets.

The changes in the revised guideline can be seen in the income and expenditures. According to the revised guideline, the administration and management costs must be indicated separately. In the past these costs were divided over other expenditures. In previous MSF-Holland fi nancial statements the management and administration costs were already explained in a separate category.

Changes in presentationIn view of the fact that the association MSF-Holland considers expenditures on the Asso-ciation’s goals to be its principle objective, it has been decided to deviate from the pres-cibed model for the presentation of income and expenditure. The fi nancial statements show the expenditures before the income. The statement of expenditure and income is shown before the balance sheet.

The basis used for the valuation of the expenditure and the assets and the accounting principles are explained in paragraph 4 of the fi nancial report. It is recommended this be read before viewing the statement of expenditure and income and the balance sheet.

1 Financial Statements 2007 Association MSF-HollandAssociation MSF-HollandAssociation MSF-Holland

Sta

tem

ent of exp

enditu

re a

nd in

com

e for 2007

in e

ur

o t

ho

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ds

expenditure Explanatory notes 2007 Budget 2007 2006

SpentonAssociationgoalsDirect aid 2.1 92,113 103,500 99,714

Preparation and coordination in the Netherlands 2.2 11,258 10,966 10,430

Information and awareness-raising 2.3 2,092 2,526 2,161

Grants to third-parties 2.4 449 389 542

TotalspentonAssociationgoals 105,912 117,381 112,847

FundraisingexpensesCosts own fundraising 2.5 7,055 7,008 5,873

Costs aquisition institutional donor grants 2.6 146 150 142

Totalfundraisingexpenses 7,201 7,158 6,015

Managementandadministration 2.7 3,345 3,317 3,372

Totalexpenditures 2.8 116,458 127,856 122,234

inCome

Income from own fundraising 2.9 33,070 30,100 28,034

Incomefromthird-partyactivities 2.10

Proceeds from the NationalPostcodeLottery 15,461 14,200 14,996

Grants from within the MSF-network 2.11 58,790 60,500 57,462

Grants from institutional donors 2.12 12,140 19,000 18,823

Other income 2.13 1,062 900 875

Totalreceipts 120,523 124,700 120,190

ResultsOperationalActivities 4,065 -3,156 -2,044

Exchange rate results 2.14 -353 -654 -182

SURPLUS/DEFICIT 3,712 -3,810 -2,226

Allocationofsurplus/defi cit

Additions/withdrawalsto:Continuity reserve 3.8 -500 0 5,000

Appropriation reserve 3.8 387 0 -407

Other free reserve 3.8 3,825 -3,810 -6,819

3,712 -3,810 -2,226

7

assets Explanatory notes 31December2007 31 December 2006

Tangiblefi xedassetsOperating assets 3.1 618 575

StocksStocks for direct aid 3.2 2,208 1,864

ReceivablesandaccruedincomeThird-party appeals 3.3 2,622 2,496

Médecins Sans Frontières network 3.4 4,983 3,502

Institutional donors 3.5 3,596 8,226

Other receivables and accrued income 3.6 3,114 3,141

14,315 17,365

Cashatbankandinhand 3.7 53,017 46,920

Totalassets 70,158 66,724

liabilities

Reservesandfunds

Reserves 3.8

Continuity reserve 59,000 59,500

Appropriation reserve 2,826 2,439

Other free reserves -1,188 -5,013

60,638 56,926

Funds 3.9

Appropriated funds 212 212

Short-termliabilities 3.10 9,308 9,586

Totalliabilities 70,158 66,724

Bala

nce s

heet as a

t 31 D

ecem

ber 2007

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Cash flow from operating aCtivities 31December2007 31 December 2006

Receipts:Contributions, (charitable) donations and gifts 24,597 20,879

Legacies and bequests (inheritances) 7,997 7,044

Grants from private organisations 300 209

Totalreceivablesfromownfundraising 32,894 28,132

Receipts from theNationalPostcodeLottery 15,316 14,996

Received from MSF-Germany 25,401 28,553

Received from MSF-United Kingdom 11,404 14,090

Received from MSF-Canada 9,017 3,534

Received from other MSF-sections 11,275 8,570

TotalreceivedfromwithintheMSF-network 57,097 54,747

(concerningprojectgrants)

Received from institutional donors 15,963 23,153

Interest received 1,122 876

Received tax net and VAT 125 281

Received from MSF-sections from monies advanced 880 1,152

Other receipts 0 117

Totalotherreceipts 2,127 2,426

Totalreceipts 123,397 123,454

continued on page 9

9

brought forward from page 8 31December2007 31 December 2006

Transport:Totalreceipts 123,397 123,454

Payments:Payments made in project countries 51,280 55,691

Grants to third parties 449 692

Payments to MSF-International (contributions) 494 604

Payments to MSF-Germany 1,433 922

Payments to MSF-United Kingdom 1,556 736

Payments to MSF-Canada 556 277

Payments to other MSF-organisations 3,101 1,343

Payments to MSF-Supply en MSF-Logistique 3,263 3,903

TotalpaymentswithintheMSFnetwork 10,403 7,785

Payments to suppliers of goods and services 33,595 36,936

Payments concerning (fi eld) workers 21,101 24,600

Other payments 58 0

Totalpaymentsatheadquarters 54,754 61,536

Totalpayments 116,886 125,704

Cashfl owfromoperatingactivities 6,511 -2,250

Cashfl owfrominvestmentactivitiesPayments concerning investments in tangible fi xed assets -414 -111

Receipts from disinvestments 0 0

TotalCashfl owfrominvestmentactivities -414 -111

Cashfl owfromfi nancingactivitiesNot applicable 0 0

Totalcashfl ow 6,097 -2,361continued on page 10

Cash fl

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the Cash flowThe cash flow statement has been prepared according to the direct method in order to provide a clearer view of the different flows of funds in the organisation. The cash flow between MSF-Holland and the international MSF-network (MSF-sections) can be distinguished. The cash flow statement also clearly shows which part of the expenditure has been made in the countries where projects are being carried out. The cash flow state-ment shows the liquidity needs of MSF-Holland but does not show the variations in the cash flow. Normally, a large part of the income is received at the end of the financial year whereas the payments are reasonably spread over the months. This means that during the year, MSF-Holland must be able to cover a large part of its costs from available funds.

The increase in the liquidity position at year-end can be attributed to the changes in the balance items. The receivables decreased by about € 3,0 million whereas the short-term liabilities remained roughly at the same level. Other increases can be attributed to the surplus gained because the income rose above the expenditures, while the fixed assets only rose very little.

reCeiptsReceipts from the Médecins Sans Frontières organisations concern project grants. Receipts from project grants (from the international organisation and institutional donors) are explained in more detail in note (3.4) and note (3.5) of this financial report.

The item “Received from MSF sections for monies advanced” consists of receivables referring to employees posted abroad not by MSF-Holland but one of its sister organi-sations, and to employees at the Amsterdam office that actually carry out work for one of the other MSF sections. These employees are not counted as part of the MSF-Holland staff.

paymentsThe majority of payments made in the project countries are to local personnel. Trans-port and storage costs and the local costs of expatriate staff are the next biggest items. Given the current structure of the projects, approximately half of the expenses for the projects are incurred in the countries or the regions where these are being carried out.

Viewed over several years, the growth in activities has meant increased expenditure in the project countries while the volume of payments made at headquarters remains roughly the same.

The payments to the MSF international organisation concern contributions to office and international coordinated activities and projects such as the campaign ‘Access to Essential Medicines’

The payments to the MSF international organisation concern remuneration for hired- in employees posted to and working in the project countries. From 2006 onwards, employees posted abroad receive a contract of employment in the country where they were recruited. The payments in 2007 increased from € 3,9 million to € 7,1 million be-cause during the period 2006-2007 according to the planning there were gradually more employees recruited by their own MSF-sections. The ‘payments concerning (posted) staff ’ through the Amsterdam office have decreased with a comparable amount. Pension contributions, social security payments, income tax, and salaries have been included in the payments concerning the (posted) staff.

The payments to the purchasing organisations ‘MSF-Supply (Belgium) and ‘MSF Logistique’ (France) are included as payments within the international organisation. Through the procurement centres/depots of MSF-Belgium and MSF-France, it is mainly vehicles, medicines and specialised help that are purchased. Major advantages of scale are obtained through joint procurement and stocks of aid supplies are more efficiently maintained within the international organisation. In 2007, a total of € 3,3 million (2006: € 3,9 million) were spent on aid materials via these organisations.

For a full overview of the related flow of funds and financial relationships within the Médecines Sans Frontières network, please refer to the combined financial statements to be published in autumn 2007. The section on ‘Associated Parties’ of this financial report shows the core figures for the year 2006.

brought forward from page 9 31December2007 31 December 2006

Transport:Totalcashflow 6,097 -2,361

MovementinliquiditypositionLiquidity position at the end of the financial year 53,017 46,920

Liquidity position at the beginning of the financial year 46,920 49,281

Movementinliquidityposition 6,097 -2,361

11

2 Explanation of the statement ofexpenses and income in �007This section explains the expenses and income in the sequence of the statement ofexpenses and income. Note 2.8 shows the total of all costs with the relevant explanations. Note 2.9 onwards gives an explanation of income.

�.1 Emergency Aidin euro thousands

The costs of emergency aid relate to projects carried out by MSF-Holland. This note gives an explanation concerning the costs of emergency aid per country and the division of these costs per country. In the annex to this fi nancial report (from page 59) an explanation per country and successively the costs per category, the costs per project activity and the fi nancing per donor is given.

The direct costs for emergency aid decreased by € 7,6 million from the € 99,7 million in 2006 to € 92,1 million in 2007. In 2007 some emergency aid projects in countries where MSF-Holland has been active for (several) years were handed over or closed.The organisation withdrew from Angola, Burundi, Liberia, Sierra Leone en Zambia and started to cut-back projects in among others, Congo-Brazzaville, Ivory Coast and Uganda. There were no new large humanitarian disasters in 2007. MSF-Holland extended its activities further in Ethiopia (Ogaden), Haiti, Somalia, Darfur and Southern Sudan.

Explanation of the statement ofExplanation of the statement ofExplanation of the statement ofExplanation of the statement ofexpenses and income in �007expenses and income in �007expenses and income in �007expenses and income in �007expenses and income in �007expenses and income in �007

1�

Costs emergenCy aid

Medical and logistical

personnel posted

National personnel

Medical m

aterials

Building materials and

sanitation facilities

Operational costs

Transport, storage and vehicles

Training and support for local institutions

Auditing, advising and

support of projects

Other general costs

Projectcosts2007

Budgeted Project costs 2007

Project costs 2006

Afghanistan 0 51 0 0 2 0 0 0 0 53 80 82

Angola 363 464 33 14 63 102 1 2 20 1,062 891 2,905

Bangladesh 610 564 164 167 81 122 6 23 50 1,787 1,181 1,645

Burundi 525 673 310 46 111 171 3 9 28 1,876 1,656 3,362

Central African Republic 1,223 694 511 138 206 751 1 31 -2 3,553 2,339 3,009

Chad 1,453 1,107 316 216 345 804 2 24 32 4,299 2,786 2,772

Colombia 792 1,169 265 39 195 225 25 33 10 2,753 2,583 2,633

Congo, Republic of 890 1,119 466 105 93 363 9 43 3 3,091 2,238 2,749

Democratic Republic of the Congo 3,155 2,669 2,452 601 629 1,783 59 60 265 11,673 11,382 11,883

Ethiopia 784 849 418 149 218 337 57 22 34 2,868 2,481 2,699

Haiti 471 1,656 626 83 58 101 5 16 29 3,045 2,516 2,389

India 979 1,048 357 24 182 235 5 38 -3 2,865 3,486 3,572

Indonesia 19 17 0 0 4 20 0 1 -2 59 73 1,260

Iraq, including Jordan 220 93 1,118 0 33 195 199 40 12 1,910 1,986 445

Ivory Coast 685 1,616 1,123 40 106 272 0 12 17 3,871 3,926 4,023

Lebanon 0 0 0 0 0 0 0 0 0 0 0 443

Liberia 197 217 45 2 30 63 1 7 6 568 555 2,516

Moldova 139 104 22 23 27 11 1 4 1 332 867 195

Myanmar (Burma) 1,041 1,402 3,594 116 173 652 52 50 48 7,128 7,025 5,787

Nepal 424 177 128 27 51 158 5 17 2 989 1,181 749

Niger 0 0 0 0 0 0 0 0 0 0 0 10

Nigeria 605 624 295 31 281 147 4 15 28 2,030 2,185 2,809

Pakistan 561 544 257 23 88 185 3 14 8 1,683 1,697 4,355

Papua New Guinea 90 9 15 63 21 47 0 3 3 251 0 53

Russia/Caucasus 535 2,033 751 88 391 276 81 30 12 4,197 3,251 4,361

Sierra Leone 529 457 336 41 50 110 1 10 7 1,541 2,131 2,665

Somalia 1,427 1,512 968 317 347 1,633 6 48 30 6,288 5,473 5,185

Sri Lanka 526 57 36 14 57 221 2 7 5 925 496 73

Subtotalcostsemergencyaid 16,734 20,284 15,058 2,167 3,512 8,102 532 553 623 70,697 64,465 74,629continued on page 13

13

brought forward from page 12

Medical and logistical

personnel posted

National personnel

Medical m

aterials

Building materials and

sanitation facilities

Operational costs

Transport, storage and vehicles

Training and support for local institutions

Auditing, advising and

support of projects

Other general costs

Projectcosts2007

Budgeted Project costs 2007

Project costs 2006

Transport:Subtotalcostsemergencyaid 16,734 20,284 15,058 2,167 3,512 8,102 532 553 623 70,697 64,465 74,629

Sudan - North / Darfur 1,487 2,501 359 192 237 548 3 60 55 5,442 4,774 7,997

Sudan - South 1,676 1,755 1,096 405 212 1,216 2 53 107 6,522 5,450 6,448

Thailand 14 0 0 0 0 1 0 1 0 16 0 0

Turkmenistan 331 225 64 8 56 34 3 5 9 735 924 939

Uganda 784 912 248 98 100 56 22 31 0 2,251 3,100 3,612

Ukraine 0 0 0 0 2 0 0 0 0 2 0 11

Uzbekistan 470 523 804 30 70 143 8 25 17 2,090 1,739 1,715

Zambia 300 437 144 41 59 80 8 21 3 1,093 1,692 1,751

Zimbabwe 882 746 1,062 111 160 347 15 47 160 3,530 3,510 3,020

Reserved in the budget for unplannedemergency aid projects

17,846

24,187 28,024 18,383 3,252 4,738 11,409 589 802 994 92,378 103,500 100,122

Other costs and movements in provisions for emergency aid costs 57 1 78 -2 -399 -265 -408

Totalemergencyaid 24,244 28,024 18,384 3,252 4,738 11,487 587 403 994 92,113 103,500 99,714

14

The strategic plan established by the Board indicates the objectives for the type of projects. These objectives can be translated in the costs of emergency aid. The graphics below show two objectives that are the most indicative for MSF-Holland’s work. MSF-Holland works in the first place in conflict areas. At least 30% of its emergency aid is carried out in conflict areas. MSF-Holland wants above all to reach the victims of conflicts so that at least 50% of its costs go to emergency aid and benefiting this group.

The proportion of the costs for medical, logistic and administrative coordination is approximately 18% of the total emergency aid costs. In 2006 that was 16%. In 2007 the coordination tasks increased because in five country projects were handed-over or were closed.

Finally, the financing of the emergency aid is shown. The long-term objective is that no more than 10% of the expenditure on emergency aid should be financed by institutional donors. In 2007 the precentage was 13% (2006:19%)

emergenCy aid in ConfliCt areas

emergenCy aid for viCtims of ConfliCt

funds for emergenCy aid

15

The costs for preparation and coordination increased in 2007 due to discontinuation of charging of travel expenses to ‘Emergency aid’ incurred by staff employed at head offi ce to provide intrinsic support to the projects. This modifi cation is based on the guideline of the international network MSF and provides a better insight into the costs of headquarter support activities. The costs increased with € 310,707. In addition, new support staff was employed for (approx. 4 FTEs) to support surgical programmes and to improve policy and administration for the national staff employed in MSF-Holland projects.

Explanatory notes 2007 Budget 2007 2006

Direct costs note 2.8 1,362 952 1,109

Costs staff head offi ce note 2.8 6,723 6,743 6,012

Share in overhead costs note 2.8 3,173 3,271 3,309

Total 11,258 10,966 10,430

Explanatory notes 2007 Budget 2007 2006

DirectcostsPeriodical Hulppost (25%; see also section 4, accounting principles) 328 411 386

Contributions to the international campaign ‘Access to Essential Medicines’ 195 195 227

Information activities in television broadcasts of the NationalPostcodeLottery 276 257 261

Other 668 1,075 470

1,467 1,938 1,344

AttributablecostsCosts personnel head offi ce note 2.8 575 540 748

Attributed overhead costs note 2.8 50 48 69

Total 2,092 2,526 2,161

2.2 Preparation and coordinationin euro thousands

�.3 Information and awareness-raisingin euro thousands

The contributions to the campaign ‘Access to Essential Medicines’ were reduced in 2007 in accordance with the guidelines of the international network.

16

2007 Budget 2007 2006

‘Drugs for Neglected Diseases Initiative’ in Geneva, Switzerland 449 389 542

Totalawardedgrants 449 389 542

�.4 Grants to third-partiesin euro thousands

The amount of the yearly contribution by MSF-Holland to the ‘Drugs for Neglected Diseases Initiative’ is determined by the division of costs agreed in the international network. The grant agreement concerning the ‘Drugs for Neglected Diseases Initiative’ was begun in 2003 and will end in July 2008.

Explanatory notes 2007 Budget 2007 2006

DirectcostsDirect mail 586 763 839

Periodical Hulppost (75%; see also section 4, accounting principles)

984 1,234 1,157

Marketing activities 3,417 3,422 2,823

Promotional campaigns 901 771 608

Other 514 209 0

6,402 6,399 5,427

AttributablecostsCosts personnel head office note 2.8 601 559 408

Attributed overhead costs note 2.8 52 50 38

Total 7,055 7,008 5,873

�.5 Costs own fundraisingin euro thousands

17

In 2007, telemarketing activities were expanded according to the plan resulting in an increase in costs in comparison with previous years. The expansion of activities was started in the autumn of 2006. MSF-Holland wants to restrict the share of government grants for aid work. At the same time, MSF-Holland is striving to retain its (fi nancial) independence and decisiveness and safeguard this for the future. This is why MSF-Holland is investing in canvassing and maintaining contacts with its donors. Extra staff have been employed in connection with the expansion of activities and the use of a new donor database. In 2007, 10 full-time staff members worked for fundraising activities (2006: 7.4 full-time staff ).

Compared with the previous year, the total fundraising costs rose from 21.1 % to 21.3% of the funds raised. In the period 2005-2007, the costs of fundraisingaveraged 19.2% of the

funds raised. This puts MSF-Holland well under the maximum of 25% set by the CBF. In the long-term, MSF-Holland is striving to keep the costs of its own fundraising under 20% of the income out of own fundraising.

The fundraising activities of MSF-Holland are in accordance with the ‘VFI Code of Conduct’ of 2000 and relevant codes of conduct of other sector organisations. MSF-Holland also has its own code of conduct for fundraising and keeps a complaints register for donors.

Composition Costs fundraising Costs own fundraising as % of inCome own fundraising

0% 5% 10% 15% 20% 25%

1�

Explanatory notes 2007 Budget 2007 2006

Costs according to specification note 2.8 7 7 7

Costs head office personnel note 2.8 128 131 124

Attributed overhead costs note 2.8 11 12 11

Total 146 150 142

�.6 Costs from acquiring government grants in euro thousands

The costs from acquiring government grants particularly concern the costs for submitting requests for a grant and for reports justifying the expenditures. The costs from acquiring government grants are included here when incurred at head office. The costs incurred in project countries are included in the coordination costs of direct aid. While the income from institutional donor grants decreased with € 6.7 million, the costs for acquiring these grants remained the same. This is mostly related to the increased reporting requirements and the reporting of donorgrants received in previous years.

�.7 Costs Management and administrationin euro thousands

Explanatory notes 2007 Budget 2007 2006

Direct costs note 2.8 981 985 1,058

Contributions to the MSF-International office section 6 265 286 379

Costs personnel head office note 2.8 1,930 1,880 1,772

Attributed overhead costs note 2.8 169 166 163

Total 3,345 3,317 3,372

The costs for ‘Management and administration’ in 2007 amounted to 2.9% of the total expenditures (2006: 2.8%) and are explained in note 2.8 b on page 21 in more detail.

19

The summary below shows the total of all costs. The costs of headquarters’ personnel and the ‘Overhead’ costs are divided in proportion to the attributed number full-time units employed at headquarters during the year. The costs of the ‘Overhead’ are shown in full in the summary of total costs. MSF-Holland wants to show the size and the type of these

costs and also indicate their attribution to its main activities and clarify how costs are divided between ‘overhead’ and ‘management and administration’. The attribution of costs to the different activities is explained in more detail in section 4; accounting principles. The total of the costs and the breakdown of the costs is as follows:

�.� Total all costs, specifi cation and division of costs in euro thousands

SpentonAssociationgoals Fundraising

Managementand

AdministrationTobe

attributed2007Total

Budget 2007 Total

2006 Total

Emergency A

id

Third-party activities

Preparation and coordination

Information and

awareness raising

Ow

n fundraising

Acquiring

government grants

Overhead

Managem

ent and A

dministration

Numberoffull-timeunitsworkingduringtheyear

535 0 112 10 10 2 33 12 714 760 757

DirectcostsdirectaidMedical and logistical staff posted

24,244 24,244 27,248 27,048

National staff 28,024 28,024 32,001 27,331

Medical materials 18,384 18,384 23,303 19,274

Building materials and sanitation facilities

3,252 3,252 3,332 5,818

Operational costs 4,738 4,738 5,001 5,470

Transport, storage and vehicles

11,487 11,487 10,886 12,795

Training and support of local institutions

587 587 834 451

Auditing, advising and support projects

403 403 895 695

Other general costs 994 994 0 832

Subtotaldirectcostsemergencyaid 92,113 92,113 103,500 99,714continued on page 20

�0

SpentonAssociationgoals Fundraising

Managementand

AdministrationTobe

attributed

Total2007

Budget total 2007

Total 2006

brought forward from page 19

Emergency A

id

Third-party activities

Preparation and coordination

Information and

awareness raising

Ow

n fundraising

Acquiring

government grants

Managem

ent and A

dministration

Overhead

Transport:Subtotaldirectcostsemergencyaid 92,113 92,113 103,500 99,714

Grantstothird-parties 449 - - - - - - 449 389 542

Contributions - - 195 - - 265 - 460 500 606

Publicityandcommunications

- - 840 5,196 - - - 6,036 6,347 4,713

Housingcosts - - - - - - 1,017 1,017 999 974

Officeandgeneralcosts - 446 401 1,174 - 465 1,129 3,615 3,926 3,621

Coststorageandstocks - 242 - - - - - 242 200 161

Travelandaccommodationcosts - 674 31 33 7 104 37 886 533 843

Externaladvicecosts - - - - - 323 249 572 458 651

CostsBoard&Association - - - - - 89 0 89 127 70

Depreciationandinterest - - - - - - 340 340 274 402

92,113 449 1,362 1,467 6,403 7 1,246 2,772 105,819 117,253 112,297

CoststobedividedforheadofficepersonnelSalaries and social security 5,148 440 460 98 1,478 523 8,147 8,851 7,807

Pension contributions 632 54 56 12 181 64 999 1,043 1,004

Other personnel costs 943 81 84 18 271 96 1,493 709 1,085

Subtotalallcosts 92,113 449 8,085 2,042 7,003 135 3,176 3,455 116,458 127,856 122,193

Rechargeofoverheadcosts 3,173 50 52 11 168 -3,455

Totalallcosts 92,113 449 11,258 2,092 7,055 146 3,345 0 116,458 127,856 122,193

�1

�.� a Division of the expenditures

In 2007, the total expenditures amounted to 97% of the total of the incomes (2006: 102%). The expenditures on Association goals amounted to € 105,9 million or 91% of the total expenditures (2006: 92%)

The expendituresonAssociationgoals amounted to 88% of the total expenditures (2006: 94%).

MSF-Holland has adopted the standard whereby a total of 80% of the expenditures or more are to be spent on the Associations goals. These goals have been amply reached. In the international-network this measure is also employed for the combined year fi gures. (see also note 2.8.b and section 5 of this fi nancial report).

�.� b Costs of Management andAdministration

The costs for ‘Management and administration’ in 2007 amounted to 2.9 % of the total expenditures (2006: 2.8%). The graph shows the course of the costs of ‘Management and Administration’ during the period 2004 - 2008.

MSF-Holland has two standards for the relationship between the different costs. On the one hand it considers the expenditures of the Associations’ goals. This standard means that at least 80% of the expenditures go to the Associations’ goals. At the same time MSF-Holland feels that no more than 20% of its activities expenditures should be spent on activities that take place in its head offi ce. The following guideline is used in relation to the total expenditures at head offi ce: Preparation and coordination 8% - 10% of the total expendituresPreparationandcoordination 8% - 10% of the total expenditures 2007: 9.7%Fundraising 5% - 8% of the total expenditures 2007: 6.2 %Managementandadministration+Overhead 6% of the total expenditures 2007: 5.7%

The indicated percentages fi t-in with the present composition of the aid projects and the present scale of the organisation. If the character or complexity of the direct aid projects changes, these standards can be adapted accordingly.

In the past years MSF-Holland has been able maintain the costs of ‘Management and administration’ and the costs of the ‘Overhead’ at the same level. Not only in relationship to the development of the total expenditures but also the costs in this category are well-controlled in absolute fi gures.

division of expenditures 2007

management and administration in % of the total Costs

79%

10%

6%2%

3%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

��

In the course of 2007, MSF-Holland posted 800 members of staff to its projects (2006: 965) equivalent to 535 full-time units (2006: 592). In 2007, MSF employed approximately 5,602 national staff (on 31 December that was 6,450).

At head office there were 179 FTEs employed in 2007. This number remained the same as in 2006. The number of FTEs involved in preparation and coordination at head office rose while the number of FTEs in overhead at head office decreased.

�.� c Personnel

The item ‘Medical and logistical staff posted’ (direct costs emergency aid) includes salaries € 10,186,545 (2006: € 14,392,185), social security, € 445,604 (2006: € 513,672) and pension contributions, € 1,068,504 (2006: € 1,358,620). Other costs include personnel costs regarding housing, international transport, training and preparation. The decrease in MSF-Holland’s salary costs and the related expenses are due to the fact that as of 1 January 2006 a growing number employees seconded from other MSF sections were paid directly in the country where they live. This change for all new hired-in employees has been completed by mid-2007. The costs of hired-in personnel are charged to the projects and have therefore been included in the item ‘Medical and logistical staff posted’.

The item ‘Salaries and social security’ of head office personnel costs exclusively consists of the gross salaries, taxed reimbursement of expenses and associated social security costs € 1,095,12 (2006: € 1,032,038). Non-taxable reimbursements, canteen costs and the costs of temporary and freelance staff employed are included in the item ‘Other personnel costs’.

In 2007, the average costs for head office personnel rose. This increase can be explained by a general rise in costs and because in 2007 there were hardly any vacancies for higher paid personnel.

The increase in the item ‘Other personnel costs’ was due to the temporary employment of personnel to improve the automation of the purchasing process which was completed in 2007. Temporary specialist staff was also hired to set-up the new donors database.

�.� d Salaries, social security and personnel costs

€ 91,355 (2006: € 80,771) is included as the fee our external auditor KPMG Accountants N.V. for auditing the Financial Report and for auditing the data in the new donor database.In the costs for ‘Auditing, advising and supporting projects’ € 76,488 (2006: € 71,132) are included for auditing project expenses, mainly for the benefit of institutional donors. In connection with the 2007 Financial Statements, KPMG visited one of the projects in Myanmar in January 2008 to carry out an audit. The costs of this audit are accounted for in 2007. The amounts shown are include VAT.

�.� e Auditors costs

The Board and Association costs cover the costs made by Board members when carrying out their task of supervision, the costs of the General Assembly and the costs for the representation of the Association in the international network Médecins Sans Frontières. With the exception of the president, members of the Board receive no remuneration. By decision of the Board of the Association, the president is granted compensation for the time that she devotes to her work. In 2007, the Board has extended the number of days for which the president may claim compensation in accordance with the actual work. This concerns a temporary extension to 4 days a week. The increased workload is due to increasing tasks within the international network Médecins Sans Frontières. The compensation paid in 2007 amounted to € 48,650 (2006: € 30,800):

�.� f Board of Directors costs and expenses paid to board members

2007 2006

49 31

Total 49 31

Compensation paid to president: A. van der Veenin euro thousands

In 2007, Mr. M. Glaser, Board member, carried out training and advisory tasks. He was paid the amount of € 7,348 (including VAT). In 2007, no paid work was carried out for the Association by the other Board members. There were no loans, no advances or guarantees provided to board members. In 2007, the number of Board members of the As-sociation MSF-Holland comprised: 10 (2006: 12).According to the statutes of the Association, the minimum number of Board members required is 10.

�3

GeneralDirector ManagementTeamG. Prescott A. Hehenkamp C. Mills M. Farkas

remuneration 2007 2007 2007 2007Gross per year including holiday allowance 90 77 78 74

Other taxable allowances 0 0 0 0

Allowance for health insurance 2 2 2 2

Subtotal 92 79 80 76

Other costs

Pension contributions 10 12 9 12

Social security costs 5 5 4 4

Total 107 96 93 92

Provisionremunerationarrears 15 12 12 11

�.� g Remuneration of the directorsin euro thousands

MSF-Holland has a titular director. In 2007, the director was employed full-time (2006: 2 people for 1.9 full-time units). The General Director is supported by a management team of 3 directors. In 2007, the remuneration of the director as defi ned in Article 2:383, par.1 Dutch Civil Code amounted to € 106,683 (2006: € 196,742). Total remuneration ofthe Directors was as follows:

2007 2006

Remuneration of the General Director, G. Prescott 107 103

Remuneration Director Operations, A. Hehenkamp 96 -

Remuneration Medical Director, C. Mills 93 -

Remuneration Director of Resources, M. Farkas 92 -

Remuneration Director Internal Affairs, J.H. Grootendorst (until November 2006)

- 94

Total 388 197

Specifi cation remuneration of the Directors:

�4

In 2005, MSF-Holland classified the directors positions according to the guideline ‘Advisory scheme for the remuneration of directors of charity organisations’. This advi-sory scheme was adopted by the members of the VFI sector organisation. Based on this scheme, MSF-Holland has classified the director to job grade I, which provides for a maxi-mum of € 113,762. In accordance with this advisory scheme, the maximum yearly income for the other Board members who are part of the management team has been classified as job grade H with a maximum of € 100,317 According to the scheme, pension and employer’s costs are not included in these payments.

The Board will reassess the management team’s job grades again in mid-2008 and adjust these to fit-in with the proposed revision of the job evaluation system used by

the organisation. The Board agreed as of 1 October 2006 the director and members of the management team back payment of salaries according to the reviewed job evaluation system.In 2007, a total amount of € 50,000 was provided for this purpose. This agreement only applies to the job evaluation made as of 1 October 2006. The General Director will resign from his position in mid-March 2008. Besides the agreements mentioned, no further compensations regarding (termination) settlement have been made.

None of the directors have additional activities. No loans, advances or guarantees were provided to any of the directors.

�.9 Income from own fundraisingin euro thousands

Explanatory notes 2007 Budget 2007 2006

Donations and gifts 22,547 21,600 19,263

Inheritances 8,177 6,500 6,876

Donations and gifts from corporate business

1,486 1,400 1,072

Donations from mailing appeals 434 500 537

Grants from private organisations 2.9.b. 300 0 223

Sales of goods 2.9.c. 113 90 52

Contributions from Association members

13 10 11

Total 33,070 30,100 28,034

�.9 a Earmarked income from own fundraising (see also note 3.9 ; the appropriation fund)

Receipts Expenditures Notspentin 2007 in 2007 in2007

Donations and gifts for various countries 137 137 0Grants from private organisations 300 300 0Balanceasat31Decembertoallocationfunds 437 437 0

All income received in 2007 earmarked by donors has been spent in this year. No addition was made to the appropriation fund in 2007.

�5

�.9 b Grants from private organisations

are as follows:Allocation in 2007 2007 2006

Population Services International

Myanmar 0 223

Medicor Foundation Congo, Republic of 300 0

300 223

The cost price for ‘Sales of goods” was € 88,635, the net income of sales was € 24,502. This concerns income from the sale of gift cards which was fully outsourced. The costs of the sales are refl ected in the other costs for fundraising, see also note 2.5.

�.9 c

�.9 d Composition of income fromown fundraising

In 2007, the income from own fundraising rose by well over € 5.1 million from € 28.0 in 2006 to € 33.1 million in 2007. The increase was greater than budgeted. In 2006 a growth of € 2.3 million was reached. The growth continued in 2007. From the end of 2006 and during the whole of 2007 MSF-Holland made more investments in own fundraising. In view of MSF-Holland’s success in 2008 these investments will be continued.

The income from public donations grew by € 3.3 million while the income from inherit-ances grew by € 1.3 million. The income from donations from companies also grew by € 0.4 million. The income from mailing appeals have indicated for a few years now a downward trend. This also why MSF-Holland yearly spends less on direct mail. Nevertheless, in 2007 MSF-Holland obtained good results from direct mail activities.

inCome from own fundraising 2007 inCome and Costs from own fundraising 2004 - 2008

2004 2005 2006 200820070

5

10

15

20

25

30

35

in million euro

�6

�.10 Income from third-partiesin euro thousands

2007 Budget 2007 2006

Proceeds NationalPostcodeLottery 15,461 14,200 14,996

15,461 14,200 14,996

As of 1 January 2008 the contract with the NationalPostcodeLottery has been renewed for a period of 5 years. In 2007, the contribution from the NationalPostcodeLottery to MSF-Holland projects has exceeded the planned budget.

�.11 Grants from within the MSF-networkin euro thousands

2007 Budget 2007 2006

MSF-Germany 25,400 25,400 28,001

MSF-United Kingdom 14,719 16,200 13,905

MSF-Canada 7,213 7,500 7,067

MSF-United States 7,133 7,425 4,775

MSF-Hong Kong 2,375 2,000 1,158

MSF-Austria 1,600 1,600 1,465

MSF-Japan 282 350 317

MSF-Spain 26 0 0

MSF-Norway 36 25 20

MSF-Luxembourg 6 0 0

MSF-Belgium 0 0 750

MSF-Denmark 0 0 4

TotalgrantsfromtheMSF-network 58,790 60,500 57,462

Grants from within the MSF-network come from:

The project grants from within MSF-networks are lower than foreseen and less than last year because in 2007 sister organisations were unable to award a number of grants. The contributions from MSF-United States have dropped due the low exchange rate of the American dollar against the Euro. MSF-United Kingdom suffered from a setback in in-

come from own fundraising In 2007, the income in Germany also fell below expectations. Despite this set-back MSF-Germany was able to transferred the pledged grants in 2007. In 2008, it is anticipated that substantially less grants will be available.

�7

�.1� Grants from institutional donorsin euro thousands

2007 Budget 2007 2006

Swedish government (Sida) 1,747 1,963

European Union (ECHO and EU) 1,743 2,957

Canadian government (CIDA) 1,424 2,191

Dutch government (BuZa) 1,394 4,206

Irish government (Ireland Aid) 1,389 1,020

3-Diseases Fund 1,064 0

Norwegian government (NORAD, NRMFA) 1,100 266

British government (DFID) 979 5,050

German government (AA) 850 -1

United Nations (UNAIDS, UNHCR, UNICEF) 450 1,142

Other institutional donors 0 29

Total 12,140 19,000 18,823

The project grants refer to the portion of the grants awarded that concern activities carried out in the fi nancial year.

Income from project grants turned out lower than estimated and lower than the previous year because MSF-Holland is working in an increasing number of countries for which it can no longer accept grants without maintaining independence and neutrality. In 2007, among others these were Colombia, Darfur, DRC and Pakistan.

Grants from institutional donors come from:

��

�.13 Other incomein euro thousands

2007 Budget 2007 2006

Income from interest 1,133 900 912

Other income and expenditure -71 -37

Total 1,062 900 875

Income from income interest rose in 2007 due to an improvement in the rate of interest for short-term savings-deposits and improved distribution of income from own fundraising and from the MSF-network.

�.14 Exchange results from currency transactionsin euro thousands

2007 Budget 2007 2006

Realised exchange results from currency transactions 195 -137

Unrealised exchange results from currency transactions

-548 -45

Total -353 -654 -182

The unrealised exchange rates concern the value of the foreign currency bank balance, the contract obligations and still to be received monies from institutional donors and sister organisations. Realised exchange rates arise in the year of purchasing the goods for projects and from receivables from grant contracts. MSF-Holland does not use any financial instruments to mitigate currency risks.

�.15 Donations in kind

Besides receiving financial support, MSF-Holland also receives donations in kind. In addition, MSF-Holland enters into contracts which do not involve payment but goods in kind. In particular, these contracts concern the delivery of food and are undertaken in project countries to support MSF-Holland’s nutrition and health programmes. These donations in kind are not registered in the bookkeeping and are also not reflected in the results. For internal purposes, MSF-Holland has registered the exchange of materials within the MSF-network, but this is not included in this explanatory statement.

MSF-Holland registers the use of goods made available by third parties if these are essentially important to execute aid projects and these would be purchased if they were not made available to the organisation. The total value of the goods received in 2007 was approximately € 935,000.

�9

united nations (wfp)

Rice 144,56 Metric Tons Cornfl our,CSB 41,15 Metric Tons RingerIV-liquid 6.300 KG

Lentils/pulses 41,39 Metric Tons Beans 2,77 Metric Tons

Vegetableoil 19,28 Metric Tons Sugar 4,81 Metric Tons

Salt 1,74 Metric Tons

united nations (unhCr)

Diesel 4.000 Ltrs Canvas,plastic 100 Rolls

Generator 1 Lot

united nations (uniCef)

Plumpy-nut 1041 Boxes MilkpowderF-75,F-100 4,75 Metric Tons Variousvaccines 26.760 Doses

Vaccinerefrigerator 1 Unit Blankets 31.000 Pieces Vaccinationmaterials p.m.

O.R.S. 2.000 Units Soap 760 KG Medicalmaterial p.m.

BP5-nutritionalbiscuits 149 Boxes Jerrycans 700 Units

united nations (unfpa)

Maternity-kit 5 Kit Medicalkit 12 Kit

international red Cross

BP5-nutrionalbiscuits 480 Boxes

ministry of health, nyala , darfur

Variousvaccines 15.100 Doses Vaccinationmaterial p.m.

greenpeaCe

Solardrivenrefrigerator 4 Units

In addition, MSF-Holland uses airplane seats and cargo-capacity made available by the European Union (ECHO) and AirServe in the Congo and the United Nations (WFP/UNHCR) in Chad. In 2007, the value of these fl ights was approximately € 315,000. The value of these has been estimated on the basis of current prices. This amount has been included in the above-mentioned total estimated value of donations in kind received in 2007.

MSF-Holland head offi ce also receives gifts in kind for its activities. Primarily, these concern adverts in the media and on websites and all sorts of advisory services.

In 2007 a pro-bono contract was signed with the International Bureau of Fiscal Documen-tation (IBFD), Amsterdam. The IBFD provides MSF-Holland with essential information on taxlegislation and practice applicable in the countries where MSF-Holland implements projects. (Charity) discounts given to MSF-Holland for purchases of goods and services are not registered.

31

3 Explanation of the Balance Sheet

operating assets Leasehold improvements Inventory Hardware/software Total2007

Purchasevalue

Balance as at 1 January 2007 175 499 863 1,537

Purchases 0 0 414 414

Disinvestments 0 0 0 0

Balance as at 31 December 2007 175 499 1,277 1,951

Depreciation

Balance as at 1 January 2007 107 306 549 962

Depreciation 35 100 236 371

Disinvestments 0 0 0 0

Balance as at 31 December 2007 142 406 785 1,333

BalanceSheetvalueasat31December2007

33 93 492 618

3.1 Tangible fi xed assetsin euro thousands

The purchase of hardware/software concerns investments in a new donor database together with the necessary server apparatus and a video conferencing system. No disinvestments were made in 2007.

Explanation of the Balance SheetExplanation of the Balance Sheet

3�

stoCk for assoCiation goals - direCt aid 2007 2006

Medical materials 1,007 795

Transport equipment 401 328

Other materials 837 741

Stocksasat31December 2,245 1,864

Provision for obsolescence -37 0

Balanceasat31December 2,208 1,864

3.� Stocksin euro thousands

The value of the project-related stocks taken into stock as at 31 December amounts to € 699,822 (2006: € 524,676). The other stocks have not yet been allocated to aid projects and concern free stocks and so-called emergency stocks. The item ‘Other materials’ consists mainly of emergency housing materials (tents, tools,etc.), water and sanitation equipment communication equipment and computers for the projects. The provision for obsolescence concerns medical materials for which the shelf life is about to expire.

2007 2006

Receivables from theNationalPostcodeLottery 2,622 2,496

2,622 2,496

3.3 Receivables from Third-Party Appealsin euro thousands

Receivables from the NationalPostcodeLottery are short-term. In 2007, because the proceeds from the National Postcode Lottery were higher (€ 15,441,744), the recei-vable as at 31 December 2007 is also higher.

33

3.4 Receivables from within the Médecins Sans Frontières networkin euro thousands

The receivables from Médecins Sans Frontières sections concern project grant contracts that have ended. The receivables are short-term.

The receivables from Médecins Sans Frontières sections throughout the year developed as follows:

2007 2006

Balance as at 1 January 3,502 1,062

Project grants awarded 58,791 57,462

Exchange rate differences -213 -275

Project grants received -57,097 -54,747

Balanceasat31December 4,983 3,502

2007 2006

Balance as at 1 January 8,225 15,785

Project grants awarded 12,070 16,376

Exchange rate differences -78 24

Project grants received -16,263 -23,153

Non-allocated project grants -358 -806

Balanceasat31December 3,596 8,226

The receivables are as follows:

Receivables from terminated project grant contracts 1,666 6,041

Receivables from current project grant contracts 1,930 2,185

3,596 8,226

3.5 Receivables from institutional donorsin euro thousands

Receivables for institutional grants comprise receivables from both awarded project grants and those that have already ended. Developments of these in the fi nancial year were as follows:

34

Receivables from institutional grants have a period shorter than one year.The ‘project grants received’ include receipts from grants from private organisations. In 2007, this amounted to € 312,000. In the cash flow statemen the division is shown.

2007 2006

Debtors 0 11

Receivable from other MSF-sections 992 674

Taxes and social security contributions to be received. 13 40

Pre-paid pensionscheme contributions 455 488

Prepayments and accrued income 1,654 1,928

Balanceasat31December 3,114 3,141

3.6 Other receivables and accrued incomein euro thousands

All other receivables and accrued income are short-term. The amounts receivable under ‘Receivable from other MSF-sections’ refer to prefinancing of joint projects, advance payments and secondment of personnel working for sister organisations.

2007 2006

Balance of cash at bank and headquarters 47,132 41,706

Balance of cash and in hand for projects 5,885 5,214

Balanceasat31December 53,017 46,920

3.7 Cash at bank and in handin euro thousands

The headquarters’ balance of cash at bank includes immediately accessible savings accounts to the sum of € 32,563,333 (2006: € 28,728,627) . These savings accounts are mostly deposited at the Fortis bank, where MSF-Holland also has its main operating ac-counts. MSF-Holland currently has 1 monthly, 3 monthly and 6 monthly bank deposits. MSF-Holland does not use any complex financial or currency exchange instruments (derivatives).

35

Continuity reserve

Allocation reserve

Other free reserve

Total2007 Total 2006

Balance as at 1 January 59,500 2,439 -5,013 56,926 59,152

Allocation of the result -500 387 3,825 3,712 -2,226

Balanceasat31December 59,000 2,826 -1,188 60,638 56,926

3.� Reservesin euro thousands

In accordance with the Board’s resolution, a continuity reserve has been formed.The amount of the reserve has been set at the average amount (over three years) ofexpenditures needed to ensure the unimpeded progress of the projects and the related supporting activities for a six-month period. In 2007, € 500,000 was withdrawn through the allocation of the result. MSF-Holland’s continuity reserve amply satisfi es the various guidelines and, through the withdrawal of € 500,000, complies with the standard set by the Board.

Within the international network organisation of Médecins Sans Frontières, a reserve for at least three and, at the most twelve months has been agreed. The lower limit of three months must also be available in cash at bank and in hand. According to the conditions of the CBF certifi cation, the continuity reserve should not exceed a maximum of one and half times the yearly costs for the operational activities. MSF-Holland considers the expenses on the project and the related supporting activities and the costs of fundraising as costs of the operational activities. Depreciation costs and one-off items are not included here.

3.� a Continuity reserve

36

The extent of the continuity reserve is calculated as follows: Expenditure 2006

Expenditure 2007

Budget 2008 6-monthaverage

Emergency Aid 103,500 92,113 95,000 48,436Preparation and coordination 10,430 11,257 11,000 5,448Information and awareness raising 2,161 2,093 2,450 1,117Own fundraising 5,873 7,055 6,600 3,255Acquisition grants institutional donors 142 145 135 70Management and administration 3,372 3,344 3,450 1,694

125,478 116,008 118,635 60,020Deduct:Depreciation costs 402 340 407 192One-off expenses (fundraising) 600 1,200 750 425Contributions (see also note 2.8) 606 460 678 291

Calculatedcontinuityreserveasat31December 123,870 114,008 116,800 59,112

Establishedcontinuityreserveasat31December 59,000

Calculatedlowerlimit(3months)continuityreserveasat31December

29,557

At the end of 2007, 92% of the reserves were retained in cash at hand in bank (2006: 86%). MSF-Holland needs a solid liquidity position to be able to guarantee the unhindered progress of its aid projects and to come into action quickly if need be.

37

Tangible fi xed assets

Stocks Total2007

Balance as at 1 January 575 1,864 2,439

Allocation of the result 43 344 387

Balance as at 31 December 618 2,208 2,826

3.� b Appropriation reservein euro thousands

The appropriated reserve is used to fi nance the tangible fi xed assets and stocks and calculated as follows:

3.� c Other free reserve

In 2007 through the allocation of the result the amount of € 500,000 was withdrawn from the continuity reserve and added to the other free reserve. In addition part of the year-end result, € 3,325,000, has been added to the other free reserve. With these additions the shortfall in the other free reserves has been reduced from € 5,013,000 to € 1,188,000.

Unused at yearend 2006

Receipt in 2007 Expenditure in 2007 Unusedatyearend2007

Earmarked income from own fundraising:Earmarked for various countries 0 437 437 0

Other earmarked funds:MSF-International: meningitis vaccines 212 0 0 212

Balanceasat31December 212 437 437 212

3.9 Appropriation fundsin euro thousands

The appropriated funds contains the funds that have been earmarked by donors for a specifi c purpose and which have not yet been spent. Note 2.9.a. gives an indication of the volume of earmarked monies that are received and spent during the year.

The balance of the appropriated funds is calculated as follows:

3�

The item ‘Payable to other MSF-sections’ refers to liabilities to MSF-Holland sister organisations that concern amounts for international projects, personnel costs and training for expatriate staff. The increase in other liabilities is the result of an increase in outstanding cheque payments in the project countries that are included in this item.Budgetary commitments are commitments arising from awarded project grants in which the commitment falls in proportion to the progress of the project. The balance

concerns the portion of the project grants that have yet to be implemented by MSF- Holland. The decline in 2007 was caused by fewer grant contracts being acquired resulting in a fall in commitments. The item ‘Budgetary commitments’ developed in the year as follows:

2007 2006

Budgetary commitments (see specification below) 1,651 2,372

Accounts payable/creditors 2,548 2,582

Payable to other MSF-sections 1,533 1,344

Taxes payable 336 336

Other liabilities 3,240 2,952

Balanceasat31December 9,308 9,586

3.10 Short-term liabilitiesin euro thousands

2007 2006

Balance as at 1 January 2,372 5,067

Listed under long-term liabilities as at 1 January 0 850

Project grants awarded in this financial year 70,860 73, 838

Exchange rate differences 8 -69

Project grants from institutional donors -12,441 -19,046

Project grants from other MSF-sections -58,790 -57,462

Totalprojectgrants -71,231 -76,508

Non-allocated project grants -358 -806

Balanceasat31December 1,651 2,372

The budgetary commitments at the end of the 2007 financial year refer entirely to the implementation of projects in 2008 and are thus short-term commitments.There were no long-term budgetary commitments at the end of 2007.

39

3.11 Commitments not included in thebalance sheet

Commitments not included in the balance sheet refer to the contract for offi ce rental (including service costs).

The total amount of these commitments is € 4,4 million for 2008 up to and including 2013. € 0,8 million refers to 2008, € 3,3 million to the years 2009 to and including 2012 and € 0,3 million to 2013.

Bank guarantees for the benefi t of third parties were granted for the rental contract of the offi ce in Amsterdam (€ 189,326) and for the temporary registration of vehicles in aid projects (€ 20,000).

The general assembly of members of MSF-Holland decided to support the ‘Drugs for Neglected Diseases Initiative’ (DNDi) through MSF-International for 5 years (from July 2003). MSF-international will divide the costs of the DNDi over the 19 MSF-sections on the basis of a number of determined parameters. These will include MSF-Holland.Because the mutual relationship between the parameters for the coming years is still to be determined, the exact amount of MSF-Holland’s contribution is not known before-hand. The contribution for 2007 was € 449,076 (2006: € 541,500) and has been included in the expenditures for Association goals; grants to third parties. The present commitment ends in 2008.

In a number of countries where MSF-Holland implements projects, taxation and litigation procedures are pending. MSF-Holland maintains a register of these. Apart from provisions made in these fi nancial statements (to a total of € 128,252) it is not known whether from these procedures signifi cant fi nancial liabilities may arise.

MSF-Holland has requested the Amsterdam Tax Offi ce to asses the possible implications for VAT being due for posted staff with a contract in a national MSF organisation (in particular MSF-Germany). At present, it is not known whether there is indeed an obligation to declare VAT for this or whether a fi nancial liability may arise.

41

4 Accounting Principles

generalThe accounting principles used for the valuation of assets and liabilities are based on historical costs. If not stated differently, assets and liabilities are shown at their nominal value. Revenues and costs are allocated to the period they relate to.

foreign CurrenCy The reporting currency is the euro. Assets and liabilities denominated in foreign currencies are valued at the exchange rate prevailing at the balance sheet date. Transactions denominated in foreign currencies are translated at the exchange rates prevailing at the transaction date. Exchange rates differences are accounted for after determination of the result out of the operational activities. The exchange results have been incorporated in the fi nancial statements according to Guideline122ofDutchAccountingStandards as Guideline 650 does not proviside for this.

Cash flow statementThe cash fl ow statement has been prepared according to the direct method. Cash fl ows denominated in foreign currencies have been translated into euros at the exchange rate prevailing at the transaction date. The cash fl ow statement has been prepared according to the direct method in order to provide a clearer view of the different fl ows of funds in the organisation, and the fl ows of funds within the international Médecins Sans Frontières organisation. This also clearly shows which part of the expenditure has been devoted to countries where projects are being carried out. The cash fl ow statement shows the liquidity needs of MSF-Holland.

tangible fixed assetsTangible fi xed assets are stated at cost less depreciation. Depreciation is calculated according to the straight-line method based on expected economic life. The following percentages are used:• leasehold improvements and inventory 20%• hardware and software 33.33%

Purchase costs of fi xed assets used for the Association goals are charged to project costs.After completion of the projects these assets are generally transferred to the benefi ciaries.

stoCks Stocks are stated at cost price less a provision for obsolescence where necessary. In 2007, a small provision has been made for obsolescence and mentioned in the explanation. The costs of the stocks are charged on to the projects at the time they are sent to the project countries.

aCCounts reCeivableAccounts receivable are stated less a provision for doubtful debtors. In 2007, there was no provision for doubtful debtors included.

inCome from own fundraising • DonationsandgiftsDirect donations from the public and private companies are accounted for on a cash basis.• ContributionsContributions from members of the Association are accounted for on a cash basis.• InheritancesInheritances are accounted for in the fi nancial year in which the amount can be estimated with a fair degree of accuracy. However, any advances paid out before that date will be accounted for in the year in which the actual payment has been received. The size of the inheritance can be established as reliable if a fair assessment of the proceeds can be made based on the stage of settlement of the inheritance. For example, this is in the case of the receipt of fi nal account-justifi cation.• Foundations,associationsandprivatefundsAs of fi nancial year 2007 grants from private organisation are shown under income from own fundraising. These grants are included as income in the statement of expenditure and income in proportion to the progress of the project.

Accounting PrinciplesAccounting Principles

4�

inCome from third-party appealsIncome from third party appeals only concern amounts from the proceeds of the NationalPostcodeLottery. Income allocated by the National Postcode Lottery to MSF-Holland have been included as income at the time of the allocation. The proceeds from the National Postcode Lottery are based on a contract and on a contractually valid financial regulation. As of 1 January 2008, the contract with the National Postcode Lottery has been renewed for a period of five years.

inCome from within the médeCins sans frontières network Project grants allocated to MSF-Holland and the subsequent budgetary obligations arising from grants from within the network Médecins Sans Frontières are shown in the balance sheet from the allocation (contract) date. These grants are accounted for as income in the statement of expenditure and income in proportion to the progress of the project. According to Guideline 650 this income should be shown under ‘Income from third-party appeals’. In view of the volume and the importance of income from within the network Médecins Sans Frontières, it has been decided to show this as a separate category.

grants from institutional donorsProject grants awarded to MSF-Holland and the related budgetary obligations are shown in the balance sheet from the awarding date. These grants are accounted for as income in the statement of expenditure and income in proportion to the progress of the project.

donations in kindDonations in kind are not financially registered and as such have not been included in the balance sheet. Donations in kind are shown in the explanatory notes in the state of expenses and income as far as they concern goods that are essentially important to MSF to be able to execute its aid projects and, had they not be made available to MSF, they would be been purchased. An explanation is given regarding received donations in kind where a reporting obligation is required. An estimated total of the current purchase rate of the received goods is shown in this financial statement.

pensionsThe pension schemes set up for the employees are based on a career-average plan with conditional indexation. All schemes have been placed with a life assurance company and, in view of the nature of the insurance contract, may be classified as so-called defined contribution schemes. This means that MSF’s commitment towards its employees, under the insurance contract concluded with the life assurance company, is limited to payment of the agreed contributions to the life assurance company. These contributions are accounted for as expenses in the year they relate to. The explanation of the division of costs (note 2.8) shows the amount included as pension contributions from the relevant pension scheme. The present insurance contract ends on 31 December 2007 and will be renewed for a period of five years.

emergenCy aid CostsCosts of emergency aid relate to the costs of the aid projects undertaken by MSF-Holland. This concerns any on-site costs incurred by the projects, including the costs of medical and logistic personnel posted and the costs of relief supplies bought via headquarters and transported to the projects. Relief supplies that have been purchased through headquarters are charged on to the projects at the time they are sent to the project country.

Supplies that have been delivered at the warehouse and are in transit are accounted for as project-related stocks and included in the balance sheet. Outstanding orders are not included in the accounts of MSF-Holland. Outstanding orders are internally reported as budget comittement and included in the three-way matching procedure.

preparation and Coordination CostsCosts of preparation and coordination relate to the costs incurred by headquarters for the direct support of aid projects carried out by MSF-Holland Relevant costs include costs of departments handling the provision of medical advice, the purchase of project supplies and the recruitment and posting of staff. The costs of the Operations Director and the Medical Director are included in this category. For aid projects in a number of countries, preparation and coordination activities has been (partly) outsourced to the sections with which MSF-Holland works intensively. The costs of the activities outsourced to support the projects directly in other MSF-sections (2007: Canada and Germany) are explained in ore detail in the section on MSF-network.

information and awareness raising CostsCosts of information and awareness raising relate to the costs of advocacy within the framework of the main goal under the constitution, the primary purpose of which is to increase the public’s awareness and to bring about a change of attitude and conduct. The allocation of costs for information and awareness raising and the categories stated below are based on the following guidelines:

• 50% of the costs of the website go to ‘information and awareness raising’ and 50% to ‘Management and administration;

• 25% of the costs of the periodical ‘Hulppost’, 25% to ‘Information and Awareness raising’ and 75% to ‘Costs own Fundraising’;

• 50% of the costs of publishing the Annual Report go to ‘Information and awareness raising’ and 50% to ‘Management and administration’

grants to third partiesGrants from MSF-Holland to third parties are stated as costs from the awarding date.

43

Costs own fundraisingFundraising costs relate to all costs of activities with the direct or indirect purpose to induce people and institutions to donate money for one or more goals 75% of the costs of the periodical Hulppost have been allocated to fundraising costs. The bank costs, which correspond to the fundraising activities, are incorporated by MSF-Holland in the ‘Management and administration’ costs. The automation costs related to the registration and communications with (potential) donors are included here.

Costs aQuisition institutional donor grantsThe costs of acquiring government grants are shown in ‘Costs of acquiring institutional donor grants’ if these costs where made at head offi ce. This particularly concerns part of the personnel costs incurred in the project administration department.

management and administration CostsManagement and administration costs relate to the costs made for directing and managing the organisation. 50% of the costs of the website have been allocated to the ‘Management and administration’ costs. In addition, 50% of the costs of the annual report allocated to the ‘Management and administration’ costs. The costs of recruiting personnel to work at the head offi ce and also the costs of performing general fi nancial administration as well as the costs of the Board and the Association have been included in this category.

overhead CostsOverhead costs relate to the costs of technical support for housing, automation, general insurances other offi ce facilities and include depreciation costs.

division of personnel Costs and overheadPersonnel costs at head offi ce have not accounted for by MSF-Holland as direct costs but in proportion to the number of allotted full-time units of personnel at head offi ce working for certain activities. The overhead costs have been attributed in the same way to different activities. Note 2.8 in this fi nancial statement explains the divisions of these costs.

45

5 Associated parties:Médecins Sans Frontières

In the reviewed Guideline650fortheReportingofFundraisingInstitutions attention is given to the fi nancial reporting of organisations that structurally work together. Strictly speaking, these defi nitions are not applicable to MSF-Holland. MSF-Holland works, of course, closely in the international network Médecins Sans Frontières. However, the association MSF-Holland is legally and fi nancially strictly independent. More and more the MSF-sections in the international network become interdependent. In addition to the necessary coordination regarding medical and operational policy, mutual policies are also determined regarding organisation development, fi nances and personnel management.

5.1 Médecins Sans Frontières partnership

MSF-Holland is part of the international MSF-network organisation of Médecins Sans Frontières, in which nineteen national organisations and a number of associated institutions are active. Besides MSF-Holland, the following four national organisations also carry out projects independently, Belgium, France, Spain and Switzerland. Médecins Sans Frontières also has offi ces in Austria, Australia, Canada, Denmark, Germany, Greece, Hong Kong, Italy, Japan, Luxembourg, Norway, Sweden, the United Kingdom and the USA. These partnership organisations provide a signifi cant contri bution to help achieve the objectives which constitute the ideas of Médecins Sans Frontières, the recruitment of expatriate staff and fundraising for projects. Every national organisation is an independent economic and legal entity

All of the national organisations have agreed to abide by the principles of the Charter of Médecins Sans Frontières. All of the national organisations are united in the ‘Association Bureau Médecins sans Frontières International’ in Switzerland. All chairpersons of national organisations are represented in the General Assembly of Members of MSF-International, the International Council. They meet at least twice a year. The International Council can make decisions that, in practice, are binding for the individual organisations. Primarily, the International Council is involved in monitoring of the objectives and the organisation’s identity and the promotion of mutual coopera-tion and policy coordination. One of the core items of its policy is the improvement of mutual responsibility and supervision. The principles of this cooperation are

determined in a number of basic documents to which all national countries have agreed.

The presidents of the associations of the fi ve operational sections, one of whom is the president of MSF-Holland, form together with the international president and the international secretary the daily management of the association ‘Association Bureau Médecins sans Frontières International’. An independent treasurer has been appointed to support the International Council Board.

Intensive international cooperation and coordination of policy and execution are important because the activities of the individual organisations have a great infl uence and are dependent on each other. There is a real chain of risks in many areas. For example, there are risks of reputation, security risks and fi nancial risks. The Board of MSF-Holland recognises these risks and together with the management team, uses all its ef-forts to promote and strengthen international collaboration.

5.� Governance and governance related risks

Next to it’s elected members in the Board of MSF-Holland co-opted members (represen-tatives) of other MSF-sections participate. In 2007, these were represented by members from MSF-Germany, MSF-United Kingdom and MSF-United States. Reciprocally, the MSF-Holland Board is represented in the board of some other sections. In 2007, this involved MSF-Germany, MSF-United Kingdom and MSF-United States. Both the representation as well as the delegation to other boards are laid down in the statutes and in the rules and regulations of MSF-Holland.

MSF-Holland works in particular with the sections in Canada, Germany and the United Kingdom. These sections are involved in the supervisory function, policy determination and at a executive level in the Association. As can be seen from the fi nancial statements these sections also provide an important fi nancial contribution to aid projects; € 47,3 million in 2007 (2006: € 49,0 million). A large part of the staff staff posted to MSF-Holland aid projects were recruited by these sections; 298 staff posted in 2007 (2006: 393 staff posted). The four organisations work together in the ‘Operations Centre

Associated parties:Associated parties:Associated parties:Associated parties:Associated parties:Associated parties:Médecins Sans Frontières Médecins Sans Frontières

46

Amsterdam’ (OCA). This collaboration only concerns the execution of aid projects and there is no formal private corporate organisation constituted. As a result, the Board of the association MSF-Holland remains legally and financially responsible for the execution of aid projects as reported upon in these financial statements. The Boards of MSF-Holland and the MSF-sections in Canada, Germany and the United Kingdom jointly established an umbrella organ; the OCA-Council. Besides the four presidents the OCA-Council there are also four delegated member who represent their Board at the OCA-Council meetings. The OCA-Council oversees the implementation of medical and operational policy according to the jointly agreed Strategic Plan 2007-2010’. The OCA-Council has no statutory status

or authorization. It has been mutually agreed that the OCA-Council approves of the operations annual plan and the interim progress reports.

At executive level the directors of the sections in Canada, Germany and the United Kingdom actively participate in the daily management and execution of projects. They constitute for the part of operations, together with four directors the MSF-Holland, the OCA-management team. Management of the office organisations is run by the individual sections.

In the total of MSF-Holland’s costs for preparation and coordination, the costs of activities that have been transferred to MSF-Canada and MSF-Germany are not included. These costs will be shown in the financial statements of the corresponding organisations. In 2007, the costs of outsourced activities cover the whole year (2006 Germany costs for the whole year) and are as follows:

5.3 Financial cooperation and financial risks

5.3 a Preparation and coordination costs

in currency 2007

2007 2006

MSF-Holland preparation and coordination costs 11,258 10,430

Costs outsourced activities MSF-Canada CAD 519.213 359 0

Costs outsourced activities MSF-Germany 881 442

Totalpreparationandcoordinationcosts 12,498 10,872

MSF-Holland can only influence the management of costs and outsourcing of activities to a certain degree. There were no direct activities assigned to MSF-United Kingdom. MSF-United Kingdom employs a pool of medical specialists who support aid projects with specialist advice, data collection and research. The actual costs of the provided advice is calculate and reflected in the financial statement under the costs of ‘Audit, advice and projects support’.

47

5.3 c International fi nancial agreements

Within the international network Médecins Sans Frontières agreements have been made regarding the division of fundraising incomes that are available for aid projects after the deduction of costs for offi ces and the contributions to MSF-International. As of the fi nan-cial year 2008 MSF-Holland can rely on a share of the net income from the following

MSF-sections. This share is shown as a percentage and concerns for some countries as a commitment in foreign currency (Canada, the United Kingdom and the United States).

These agreements enable the risk of disappointment of incomes from public donor appeals to be spread more evenly and thus obtain better guarantees for the continuity of the aid projects implementation.

The agreements regarding contributions to the MSF international offi ce are based on the income from own fundraising from the previous year. In 2007, MSF-Holland’s share was 7.78% of the total of MSF-international costs. This share is set for 8.82% in 2008. The budgets and thus the contributions are determined yearly by the International Council. The International Council can decide to start and to fi nance coordinated projects. National organisations are not automatically obliged to make a fi nancial contribution. MSF-Holland contributes to the MSF International campaign ‘Access to Essential Medicines’. MSF-Holland’s contribution is shown as contributions in this fi nancial statement.

Agreements have been made regarding the amount, the costs and location of the total re-serves in all MSF organisations. Internal, combined budget and cash fl ow reports are made each month. A guideline for General Accepted Accounting Principles to be used within the network-MSF has been agreed which also includes the principles for costs attribution.

As of 2006 agreements have been made regarding the employment of expatriate per-sonnel. In principal, all expatriate personnel receive a contract in the country they reside in if an MSF-section has an offi ce in that country. The terms of employment for expatriate personnel have been fully harmonised as also the standardisation of the remuneration structure to both the ratio of the local cost of living as well as the indexed social security premiums. All posted staff have been insured and are covered by one worldwide insurance policy . In 2008 a mutual insurance for general liability will be arranged to cover the organisation worldwide.

Share Currency

MSF- Canada 70% CAD

MSF- Germany 70% EUR

MSF-United Kingdom 70% GBP

MSF- Hong Kong 30% EUR

MSF-Austria 30% EUR

MSF-United States 7.5% USD

MSF-Sweden 30% EUR

5.3 b Payments and receipts

The payments and receipts from within the Médecins Sans Frontières network have been included in this fi nancial statement and are specifi cally mentioned, where possible.

Payments within the MSF-network concern payments for hired-in staff who are posted and employed in project countries. A mutually agreed framwork agreement was drawn up for all hired-in staff which includes agreements on mutual liability. The compen-sations are based on average real cost daily rates in which no increments or overhead have been calculated. The other payments concern the purchase of project goods from the

procurement organisations ‘MSF-Supply’ (Belgium) and ‘MSF Logistique’ (France)and the epidemiological research and data analysis of ‘Epicentre’, which is part of MSF-France.

The receipts from other MSF-sections mainly concern part of the project grants. Project grants are based on mutual contracts all of which must be shown in a report. In addition, MSF-Holland receives a small compensation for staff hired-in by other sections. In 2007 this was € 249,111 .

4�

Since 2003 the international MSF organisation publishes a combined financial statements. The 2007 combined financial statements will be published mid-2008 after the publication of the Dutch financial statements. The combined financial statements for 2006 has been accompanied with an unqualified opninion issued by KPMG S.A. and Ernst

& Young et autres, Paris, France. The balance sheet and the statement of income and expenditure are included below. The combined 2006 financial statements can be found on MSF-Holland’s’ website www.artsenzondergrenzen.nl or www.msf.org.

5.4 �006 Combined financial statements

inCome 2006 2005

Donations public appeals 405,122 472,712

Grants from private organisations 83,272 70,280

Subtotalownfundraising 488,394 542,992

Grants from institutional donors 61,780 90,303

Other income 18,534 15,680

TotalIncome 568,708 648,975

expenditures

Expenditures for Association goals

Direct costs emergency aid -375,385 -347,873

Preparation and coordination -55,791 -49,504

Information and awareness raising -18,039 -15,955

Third-party activities -7,912 -7,974

SubtotalexpendituresforAssociationgoals

-457,127 -421,306

other expenditures

Fundraising -71,844 -59,829

Management and administration -30,845 -28,106

Income tax -89 -53

Subtotalotherexpenditures -102,779 -87,988

TotalExpenditures -559,906 -509,294

Exchange rate results -4,542 4,071

Surplus(deficit) 4,260 143,752

Médecins Sans Frontières combined income and expenses for �006in euro thousands

indiCations for balanCe inCome and expenses 2006 2005

Spent on Association goals / total expenses 81,6% 82,7%

Spent on Association goals / total income 80,4% 64,9%

Costs fundraising / Income own fundraising 14,7% 11,0%

Management and Administration / Total expenses

5,5% 5,5%

2005 figures deviate due to high income for the Tsunami

49

Médecins Sans Frontières combined balance sheet �006in euro thousands

total 2006 2005

Intangible fi xed assets 2,037 1,250

Tangible fi xed assets 29,218 29,309

Financial assets 4,511 4,925

Fixedassets 35,766 35,483

Stocks 19,485 14,232

Grants from institutional donors to be received 18,969 29,271

Contributions to be received 16,891 12,596

Debtors 6,250 4,644

Other amounts to be received 4,678 5,820

Cash at bank and in hand 347,454 352,129

Currentassets 413,727 418,692

TotalAssets 449,493 454,174

Appropriation reserves 2,478 2,846

Free reserves 389,361 384,614

Other reserves -7,102 1,519

Subtotalreserves 384,737 388,979

Provision and contingent liabilities 4,300 3,633

Financial debts 5,256 4,873

Accounts payable and accrued liabilities 44,026 42,722

Deferred income 11,162 13,940

Overdrafts 12 26

SubtotalLiabilities 64,756 65,195

Totalliability 449,493 454,174

indiCators for the balanCe sheet 2006 2005

Reserves as % of total expenditures 69% 76%

in a number of months 8,2 9,2

Current Ratio 6,4 6,4

Solvability 86% 86%

51

6 Long-term forecast

The long-term forecast is the fi nancial translation of the ‘Strategic plan 2007-2010’ that was approved by the Board in 2006. In this period of the strategic plan continuation of the projects is foreseen which translates into steady growth of the organisation. In the reality the costs of emergency aid vary because the organisation is partly dependent on need for medical emergency help in the event of confl icts natural disasters.

In 2007, the costs of emergency help were lower than forecasted. This fall can be at-tributed to the fact that MSF-Holland has closed into projects in countries which have become a lot more stable like, Angola, Burundi and Sierra Leone, and where development agencies can return to. Furthermore, in 2007, no major new humanitarian crises occurred which required MSF-Holland’s assistance. The initial budget for emergency aid in 2008 has been lowered. This is to meet the wish for a balanced budget. Should the income in 2008 allow for a higher expenditure then it will be considered to increase emergency aid. Although projects have been ended, the expenditure on emergency aid has gone up. The increasing costs are particularly related to the increasing numbers of HIV/AIDS patients, the sharp rise in the costs of treatment methods, and the increased complexity of the aid projects.

Long-term forecastLong-term forecast

5�

6.1 Forecast of income and expenditurein euro thousands Actual Actual Actual Budget Forecast Forecast

inComes 2005 2006 2007 2008 2009 2010

Incomefromownfundraising 25,979 28,034 33,070 33,700 36,000 39,000

Share in joint appeals 7 0 0 0 0 0

Share in third-party appeals:

Proceeds from NationalPostcodeLottery 14,662 14,996 15,461 15,000 15,000 15,000

IncomefromMSF-networkactivities 53,383 57,462 58,790 55,100 64,700 69,100

Grantsfrominstitutionaldonors 27,745 18,823 12,140 16,000 12,000 11,000

(as a % of the emergency aid expenses) 30% 19% 13% 17% 11% 10%

Otherincomeandexpenditure 2,099 875 1,062 200 200 200

TotalavailableforAssociationgoals 123,875 120,190 120,523 120,000 127,900 134,300

expenditures

SpentonAssociationgoalsEmergency aid 93,952 99,714 92,113 95,000 106,800 111,800

Preparation and coordination in the Netherlands 9,523 10,430 11,258 11,000 9,500 9,500

Information and awareness raising 2,498 2,161 2,092 2,450 2,200 2,500

Institutional grants awarded to third-parties: 645 542 449 442 0 0

TotalspentonAssociationgoals 106,618 112,847 105,912 108,892 118,500 123,800

(as a % of the total available for Association goals - policy standard is > 80%)

86% 94% 88% 91% 93% 92%

FundraisingincomeCosts from own fundraising 3,566 5,873 7,055 6,600 6,000 6,250

(as a % of the income own fundraising - target is < 20%) 14% 21% 21% 20% 17% 16%

Costs from institutional grants 120 142 146 135 0 0

Managementandadministration 3,215 3,372 3,345 3,450 3,500 3,500

Totalexpenditures 113,519 122,234 116,458 119,077 128,000 133,550

(as a % of the total of income) 92% 102% 97% 99% 100% 99%

Resultfromoperationalactivities 10,356 -2,044 4,065 923 -100 750

53

6.� Development of the costs and indicatorsin euro thousands

Actual Actual Actual Budget Forecast Forecast

preparation and Coordination 2005 2006 2007 2008 2009 2010

Preparation and coordination costs Amsterdam 9,523 10,430 11,258 11,000 9,500 9,500

Costs outsourced work MSF-Canada + MSF-Germany 0 442 1,240 1,250 1,300 1,350

Totalpreparationandcoordinationcosts 9,523 10,872 12,498 12,250 10,800 10,850

(as a % of the total spent on Association goals - policy standard is 8-10%) 9% 10% 12% 11% 9% 9%

Information and awareness raising 2,498 2,161 2,093 2,000 2,200 2,500

Management and administration plus costs fundraising expenditures 6,901 9,387 10,546 10,185 9,500 9,750

(as a % of the total expenditures - policy standard 10- 12%) 6% 7% 9% 8% 7% 7%

TotalexpendituresatAmsterdamoffi ce 18,922 22,420 25,137 24,435 22,500 23,100

(as a % of the total expenditures - policy standard is < 20%)

17% 18% 22% 21% 18% 17%

MSF-Holland applies a number of indicators to steer its fi nancial policy and to prepare the budget. These indicators are used to determine whether the organisation is effecti-vely managed and whether the majority of the expenditures are in fact be spent on aid projects. In accordance with the standards in the MSF international network, MSF-Holland strives to devote at least 80% of its expenditure to this goals. This means that the expenditures on ‘Management and Administration’ plus the costs of fundraising may not amount to more than 20% of the expenditure. In reality, these expenditures the scale of

the aid activities are much lower. MSF-Holland imposes its own stricter policy standard in which the expenditures at headquarters may not amount to more than 20% of the total expenditure. This standard will not be achieved in 2007 and 2008 because the expenditures in aid projects have decreased slightly and, at the same time, investmentsin own fundraising have been made.

Part of the management of the projects carried out by MSF-Holland is being outsourced to the sister organisations in Germany and Canada. In the short term, this will result in higher costs. In the long term, under the same circumstances, it is anticipated that the costs of the offi ce in Amsterdam will drop. For the time being, the budget is based on equal size because an increase in the activities and an increase in the complexity of the projects is expected.

MSF-Holland strives to retain its (fi nancial) independence and decisiveness and safeguard them for the future. From the point of view of independence, MSF-Holland

wants to limit the share of government grants in fi nancing aid. For this reason, invest-ment in fundraising is deemed essential. In 2006 and 2007 investments have been made in fundraising. In view of the good results obtained, investments in own fundraising activities will be continued in 2008. As a result the percentage of costs for fundraising have risen in comparison with the income. On an average in 2008 this percentage will increase to 20 percent over a period of three years and then decline. As such MSF-Holland will remain well within the standard of 25 percent set by the CBF.

54

Actual Actual Actual Budget Forecast Forecast

2005 2006 2007 2008 2009 2010

Number of posted staff 590 592 535 540 575 575

Number of staff office Amsterdam 167 179 179 176 172 172

Number of national staff in projects 7,800 6,450 5,602 5,250 5,000 5,000

6.3 Development of staffingin fulltime equivalents

In 2005 and 2006 the number of national staff working for MSF-Holland was counted as per 31 December. The administration of national staff has been improved thus the number of staff in financial year 2007 has been changed to show full units (FTEs).

55

7 Other

The fi nancial statements have been prepared by the management and are unanimously adopted by the Board of the association MSF Holland in its meeting of April 29, 2008. The annual fi nancial statements will be presented for approval to the General Assembly to be held May 24th, 2008.

Amsterdam, 29 April 2008,

TheAssociationBoardandtheDirector

Auditors’ reportTo: the Board of vereniging Artsen zonder Grenzen

We have audited the 2007 fi nancial statements of vereniging Artsen zonder Grenzen, as included on pages 3 to 47 of this annual report and comprising the balance sheet as at 31 December 2007 and the balance of income and expenditure for 2007 with the notes.

Management’sresponsibilityThe management of the Vereniging is responsible for the preparation and fair presen-tation of the fi nancial statements, as well as for the preparation of the annual report, both in accordance with the Fundraising Institutions Accounting Guideline (RJ 650, revised 2007). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair representation of the fi nancial statements that are free form material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’sresponsibilityOur responsibility is to express an opinion on the fi nancial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance on whether the fi nancial statements are free from material misstatement. An audit invol-ves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement,

including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair representation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the fi nancial statements give a true and fair view of the fi nancial position of vereniging Artsen zonder Grenzen as at 31 December 2007 and for the result for the year 2007 in accordance with the Fundraising Institutions Accounting Guideline (RJ650, revised 2007).

We report that, as far as we could determine, the annual report is consistent with the fi nancial statements.

Amstelveen, 29 April 2008

KPMG ACCOUNTANTS N.V.

W. Tjoelker RA

OtherOther

57

abbreviations

buZa dutch ministry of foreign affairs

Cida Canadian international development agency

dfid department for international development (Great Britain)

eCho european Commission humanitarian aid offi ce

eu european union

ireland aid (dCi) development Cooperation ireland - ireland aid

norad norwegian agency for development Cooperation

nrmfa royal norwegian ministry of foreign affairs

psi population services international

sho Cooperative aid organisations

sida swedish international development Cooperation agency

unaids Joint united nations programme on hiv/aids

unfpa united nations population fund

unhCr united nations high Commissioner for refugees

uniCef united nations Children’s fund

wfp united nations World food program

msf-a médecins sans frontières austria

msf-b médecins sans frontières Belgium

msf-C médecins sans frontières Canada

msf-g médecins sans frontières Germany

msf-hk médecins sans frontières hong Kong

msf-io médecins sans frontières international offi ce

msf-J médecins sans frontières Japan

msf-lux médecins sans frontières luxemburg

msf-s médecins sans frontières sweden

msf-sp médecins sans frontières spain

msf-n médecins sans frontières norway

msf-uk médecins sans frontières united Kingdom

msf-usa médecins sans frontières united states of america

msf médecins sans frontières

msf-sectie national médecins sans frontières organisation

npl national postcode lottery

vfi the association of fundraising institutions