Rapport   Financial Report 2005

RF_2005-eng.pdf 3.43 MB

The Treasurer’s introduction

In this financial report, you will find the following documents for three consecutive years :

1. the balance sheet as at 31/12/2005 which is a statement of our association’s assets and liabilities on that date,
2. the income statement 2005 which shows our association’s operating income and explains the flows of income and expenses per type,
3. the statement for allocation of Resources 2005 which shows how sources of funds have been used over 2005, according to our applications, structured by type of use and indicating the association’s major fields.
4. the forecast budget for 2006 expressing our association’s policy and the challenges that lie ahead.

The tables are presented together with numerous figured comments and narratives to enable you to further understand the financial statements 2005 in detail. The first aspect that emerges from these accounts for 2005 is our association’s net income at some € 4 million. This result firstly reflects our association’s sound financial situation and the good management of our funds. It is partly due to the "de-allocation" of 50% of our tsunami gifts to all of the action conducted by Médecins du Monde, which has been accepted by our donors.
Please note that in accordance with the recommendation made by the statutory auditors, this operation was put to the vote at the general meeting. The result is also due to a considerable transfer of our association’s deferred commitments.
As regards our income statement for 2005, the surplus is generated by our association’s activity, as this operating result is not affected by any significant financial or unusual item. Our association’s income for 2005 is up by 20% compared to 2004 to € 55 million and expenses for 2005 also increased, but to a lesser extent, by 11% compared to 2004 € 51 million. These expenses reflect the increase in the activity of our social missions (Purchases, Salaries and Social Contributions with a greater development of our employees on our missions), in the fall of our engagements to realize and in the equipments to depreciation A more detailed analysis of the result shows, in the balance sheet 2005 :

• Own funds used for our social missions reaching € 21 million by integrating our association’s income in 2005.
• Good asset management, significant in terms of decrease in our receivables (€ -3,5 million compared to 2004) and high amounts of available cash (€ 23 million in short-term investments and cash) which more than covers all of our long- and short-term liabilities.
• A structure based little on investment which thus means less amortization weighs on it. It should be noted that our association has introduced the new regulations applicable as at 01/01/2005 for assets which reduce the depreciation posted for 2005 by € 138 000. Funds focussing on action By analysing our statement of application of funds for 2005, the salient points that emerge concerning our applications are :
  • A constant and significant increase in our association’s commitment to its social missions, i.e. more than € 35 million in 2005 which greatly benefits our programmes abroad.

This increase is the result of a pro-active policy our association has been implementing for several years now, aiming to position and reinforce our missions in all areas of action, be it emergency, crisis or development.
Thus, the missions ratio now amounts to 73% of our total applications in 2005 and the field commitment (proportion of expenses for missions abroad and in France in the social missions) exceeds the 50%-mark to reach 55% this year.

• The decrease in our fund-raising costs, without however neglecting the investments required to find new donors. This decrease is the fruit of major work undertaken by our association to effectively control our production costs.

Out of concern for equity between allocated and non-allocated funds raised, we have decided that 15% of the dedicated funds raised shall be allocated to management expenses. The ratio of fund-raising costs is below 20%, i.e. 18% for the year 2005.

• The drop in our operating costs (-2.5 points) after two consecutive years of stability at around 9%. The ratio of our operating costs thus stands at 7% today.

In terms of our sources for 2005, several positive elements this year reflect the efforts made in development and diversification.

• An increase in gross funds raised despite the expected effects of the posttsunami emergency and a net margin strengthened by the lower fund-raising costs.

• An increase in gifts, with more than € 4 million received for the activity in 2005.

• A substantial increase in our subsidies, particularly public subsidies, and from the growing activity of our representative offices. The association has resources to match its ambition. In this particular situation, and with the constant aim of guiding management efforts to strengthen and develop action in the field, the association needed to have an ethical and ambitious budget in line with the challenges that lie ahead. The budget 2006, which is prudent and shows a deficit of € 2,5 million, highlights the major focuses of the current year :

• Adequate investment in fund-raising,
• Diversification in financing and the means to be implemented
• Continued efforts in relation to the social missions with a budget of € 2 million granted to start up new missions or to reinforce the own funds of existing missions.

At this prospect and with these resources, “we care for those that the world is gradually forgetting” with all the members who make up our association: association workers, volunteers and salaried employees.

Pierre KEMPF
Treasurer