Secretariat of the Convention on Wetlands of International Importance (Ramsar) Gland (Switzerland) Report of the auditor on the financial statements 2015

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Secretariat of the Convention on Wetlands

of International Importance (Ramsar)

Gland (Switzerland)

Report of the auditor

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PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, CH-1211 Genève 2, Switzerland Téléphone: +41 58 792 91 00, Téléfax: +41 58 792 91 10, www.pwc.ch

PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Report of the auditor

to the Standing Committee of the Secretariat of the

Convention on Wetlands of International Importance (Ramsar) Gland (Switzerland)

Report of the auditor on the financial statements

On your instructions, we have audited the accompanying financial statements of the Secretariat of the Convention on Wetlands of International Importance (Ramsar), which comprise the balance sheet, statement of income and expenditure, cash flow statement and notes, for the year ended 31 December 2015.

Managements’ responsibility

Management is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Management is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial 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 system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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2 Other matters

The Appendix A as of 31 December 2015 and for the year then ended, is presented for the purpose of additional analysis and is not a required part of the financial statements. The information included in Appendix A is the responsibility of the Ramsar’s management. The information in Appendix A has not been subject to audit procedures; accordingly, we neither express any assurance nor issue an audit opinion on the information included in Appendix A. Our opinion is not qualified in respect of these matters.

PricewaterhouseCoopers SA

Yves Cerutti Julien Ménoret

Audit expert

Auditor in charge Audit expert

Geneva, 28 June 2016

Enclosures:

- Financial statements (balance sheet, statement of income and expenditure, cash flow statement and notes)

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S

ECRETARIAT OF THE

C

ONVENTION ON

W

ETLANDS OF

I

NTERNATIONAL

I

MPORTANCE

E

SPECIALLY AS

W

ATERFOWL

H

ABITAT

(RAMSAR, IRAN, 1971)

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T

ABLE OF

C

ONTENTS

Page

BALANCESHEET 3

STATEMENTOFINCOMEANDEXPENDITURE 4

CASHFLOWSTATEMENT 5

NOTES TO THE FINANCIAL STATEMENTS

1. Activity 6

2. Summary of Significant Accounting Policies and Definitions 7

3. Staff Costs 10

4. Exchange gain and loss 10

5. Provisions for Staff Termination, Leave and Repatriation 10

6. Contracting Party Receivables, net 11

7. Other Receivables 11

8. Other Payables 11

9. Amortisation 11

10. Swiss Government Tax Rebate 12

11. Unrestricted Reserve Fund 12

12. Projects Financed by Restricted Funds 12

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- 3 -

S

ECRETARIAT OF THE

C

ONVENTION ON

W

ETLANDS OF

I

NTERNATIONAL

I

MPORTANCE

ESPECIALLY AS

W

ATERFOWL

H

ABITAT

(R

AMSAR

,

I

RAN

,

1971)

in thousands of Swiss Francs (CHF '000s) Notes

ASSETS Current assets

Cash and short term bank deposits 4,652 6,443 Contracting party receivables (net) 6 658 460

Other account receivables 7 88 11

Total current assets 5,398 6,914

Fixed assets (net)

Office furniture and computer equipment at cost 82 101 Less: accumulated depreciation 9 (48) (61)

Total non-current assets 34 40

TOTAL ASSETS 5,432 6,954

LIABILITIES AND FUND BALANCES Current liabilities

Amounts owed to IUCN 775 514

Other payables 8 630 839

Accrued liabilities 293 381

Total current liabilities 1,698 1,734

Provisions

Staff repatriation 5 124 128

Staff leave 5 165 123

Staff termination 5 227 128

Total provisions 516 379

Fund and Reserves

Unrestricted reserve fund 11 372 709

Restricted projects 12 2,846 4,131

Total fund and reserves 3,218 4,841

TOTAL LIABILITIES AND FUND BALANCES 5,432 6,954

BALANCE SHEET AS OF 31 DECEMBER

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- 4 -

S

C

ONVENTION ON

W

ETLANDS OF

I

NTERNATIONAL

I

MPORTANCE

ESPECIALLY AS

W

ATERFOWL

H

ABITAT

(R

AMSAR

,

I

RAN

,

1971)

STATEMENT OF INCOME AND EXPENDITURE for the year ended 31 December

in thousands of Swiss Francs (CHF '000s) Notes Core Funds Restricted Projects Total FundsCore Restricted Projects Total

Income

External Income:

Contributions from Contracting Parties 3,779 - 3,779 3,779 - 3,779

US Voluntary Contributions 1,066 84 1,150 1,066 12 1,078

African Voluntary Contributions 1 8 9 - 2 2

Project Income - 1,125 1,125 - 2,007 2,007 Swiss Tax Rebates 10 222 - 222 168 - 168

Total external income 5,068 1,217 6,285 5,013 2,021 7,034 Transfer between core and projects (287) 287 - (270) 270

-Total Income 4,781 1,504 6,285 4,743 2,291 7,034 Expenditure Operating Expenditure: Communications (Outreach) (590) (444) (1,034) (660) (293) (953)

Regional Advice, Initiatives and Support (1,230) (324) (1,554) (1,365) (562) (1,927) Scientific and Technical Services (158) (15) (173) (139) (90) (230)

Partnerships (251) (526) (777) (228) - (228)

Management, Operations and Support (2,426) (1,484) (3,910) (1,870) (682) (2,552) Total Operating Expenditure (4,655) (2,793) (7,448) (4,261) (1,628) (5,889) Net Surplus/(Deficit) before Financial Income/Expenditures 126 (1,289) (1,163) 481 663 1,145 Other Income/(Expenditures): Financial Income 4 74 14 88 107 38 145

Financial Expenses 4 (329) (10) (339) (31) (6) (37)

Provisions and write-offs (expense) 6 (208) - (208) (98) - (98)

Total Other Income/Expenditures (463) 4 (459) (22) 32 10

Net Surplus/(Deficit) after Financial Income/Expenditures (337) (1,285) (1,622) 459 695 1,154 STATEMENT OF CHANGES IN FUNDS for the year ended 31 December in thousands of Swiss Francs (CHF '000s) Core Funds Restricted Projects Total FundsCore Restricted Projects Total Fund balance at the beginning of the year 709 4,131 4,840 709 2,977 3,686 Net income / (expenditure) for the year (337) (1,285) (1,622) 459 695 1,154 Transfer (from)/to reserve fund - - - (459) 459

-Fund balance at the end of the year 372 2,846 3,218 709 4,131 (4,840)

2015 2014

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- 5 -

S

C

ONVENTION ON

W

ETLANDS OF

I

NTERNATIONAL

I

MPORTANCE

ESPECIALLY AS

W

ATERFOWL

H

ABITAT

(R

AMSAR

,

I

RAN

,

1971)

Cash Flow Statement for the year ended 31 December 2015

in thousands of Swiss Francs (CHF '000s) 2015 2014

Cash flow from operations

Surplus/(Deficit) from Operations (1,622) 1,154

Depreciation of fixed assets 17 11

Increase / (decrease) in provisions for membership dues in arrears 208 98 Increase / (decrease) in staff leave and repatriation liabilities 38 3 Increase / (decrease) in the provision for staff termination 99 7 (Increase) / decrease in membership dues receivables (net) (406) (184) (Increase) / decrease in receivables from partner organisations 261 443

(Increase) / decrease in other accounts receivable (81)

Increase / (decrease) in membership dues paid in advance (146) 16 Increase / (decrease) in accounts payable and accrued liabilities (194) 137

Increase / (decrease) in social charges payable 45 (15)

Total Cash flow from operations (1,781) 1,670

Cash flow from investing activities

Purchase of fixed assets (10) (38)

Total Cash flow from investing activities (10) (38)

Net Cash inflow/(outflow) for the year (1,791) 1,632

Cash and short term deposits at the beginning of the year 6,443 4,811

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- 6 -

S

C

ONVENTION ON

W

ETLANDS OF

I

NTERNATIONAL

I

MPORTANCE

ESPECIALLY AS

W

ATERFOWL

H

ABITAT

(R

AMSAR

,

I

RAN

,

1971)

N

OTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED

31 D

ECEMBER

2015

1. A

CTIVITY

The Convention on Wetlands of International Importance especially as waterfowl habitat, signed in Ramsar, Iran, in 1971, is an intergovernmental treaty which provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources. The Convention's mission is the “Conservation and wise use of all wetlands through local, regional and national actions and international cooperation, as a contribution towards achieving sustainable development throughout the world".

Under the treaty, the Contracting Parties agree, inter alia to:

• promote the conservation and wise use of wetlands through international

co-operation

• implement the conservation and wise use of wetlands within their territory

• encourage research and exchange of data regarding wetlands

• endeavour to establish and manage reserves for wetlands and to increase waterfowl populations on wetlands

• promote training of competent personnel in the field of wetlands research,

management and wardening.

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2. S

UMMARY OF SIGNIFICANT ACCOUNTING

P

OLICIES AND

D

EFINITIONS

i. Accounting principles applied in the preparation of the financial statements

These financial statements have been prepared in accordance with the provisions of commercial accounting as set out in the Swiss Code of Obligations (Art. 957 to 963b CO, effective since 1 January 2013). Significant balance sheet items are accounted for as follows:

ii. Currency

All figures are in thousands of Swiss francs (CHF) unless otherwise indicated.

iii. Contributions from Contracting Parties

Contributions from Contracting Parties are determined in accordance with the UN Scale of assessments for contributions of Member States to the United Nations budget approved by the UN General Assembly. These are then attributed to the Ramsar budget. Contributions are accounted for on an accruals basis.

iv. Voluntary contributions and other income

Any voluntary contributions and receipts of other income are accounted for on a cash basis, when they are received by Ramsar.

v. Expenditure

Expenditure is accounted for on an accruals basis.

vi. Accrued Liabilities

Accrued liabilities are calculated using time based method.

vii. Unrestricted Funds

Unrestricted funds are funds that are not subject to any externally imposed restrictions on their use. The Secretary General is empowered by the Standing Committee of the Convention to determine how these funds are applied.

viii. Restricted Funds

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- 8 - ix. Foreign Exchange

The Secretariat’s accounting records are maintained in Swiss Francs which is the reporting currency. Except for fixed assets which are stated at historical values, all assets and liabilities expressed in other currencies are translated at exchange rates ruling at the end of the year. Items of income and expenditure in other currencies are included in the financial statements at the exchange rate prevailing at the date of the transaction. Bank accounts expressed in US dollars (USD) and Euros (EUR) or other currencies are revalued to Swiss Francs at the year-end rate of exchange.

x. Year-end Exchange Rates

The following are the principal rates of exchange to the Swiss Franc used to revalue the balance sheet accounts at the end of the year.

31 December 2015 31 December 2014

USD 0.9908 0.9894

EURO 1.0826 1.2027

NOK 0.1132 0.1321

xi. Provisions against dues receivables from contracting parties

The management of Ramsar applies a method of provisioning against outstanding dues from contracting parties as follows:

• Outstanding dues from contracting parties for 6 or more years 100%

• Outstanding dues from contracting parties for 5 years 80%

• The rest of outstanding dues from contracting parties 5%

xii. Fixed assets

Fixed asset purchases are capitalized when the purchase price is CHF 1,000 and above (or the equivalent in other currencies) and when ownership resides with Ramsar. Fixed assets are depreciated over their estimated useful lives on the following basis:

• Office furniture 7 years

• Office equipment 5 years

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- 9 - xiii. Reserve Fund

The Reserve Fund receives annual surpluses/(deficits) from core operations which are accumulated and held to meet unforeseen and unavoidable expenses. Resolution XI.2 of COP11 stipulates that the Reserve Fund should not be less than 6% of the annual core budget of the Convention and not greater than 15%.

xiv. Statement of Income and Expenditure

Following the decision of SC51-22, the Statement of Income and Expenditure for year ended 2015 are presented by “function of expense” and this is a change from 2014 financial statement presentation. A brief explanation of each function is as follows:

• Communications (Outreach) manages the communications functions of the

Secretariat (publications, workshops, translations and websites);

• Regional Advice, Initiatives and Support provide the support to the Contracting Parties in their implementation of the Convention such as advice on the wise use of the wetlands in the territory and the designation and conservation of Ramsar Sites;

• Scientific and Technical Services provides support to the Scientific and Technical Review Panel (a subsidiary body of the Convention responsible for providing scientific and Technical advice to other Convention bodies, such as the Conference of the Parties, the Standing Committee, and the Ramsar Secretariat);

• Partnerships manage relationships between public and private partnerships; and

• Management, Operations and Support are the administration functions of the

Secretariat.

xv. Comparability

The 2014 presentation has been changed in order to comply with the new 2015 financial statements presentation and new Swiss Law on accounting. They differ from 2014 financial statements.

xvi. Full-time equivalents

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3. S

TAFF

C

OSTS

Staff costs include salary, recruitment and allowances (education and housing).

in thousands of Swiss Francs 2015 2014

Communications (Outreach) 633 652

Regional Advice, Initiatives and Support 1,147 1,104

Scientific and Technical Services 107 106

Partnerships 327 144

Management, Operations and Support 1,403 871

Total 3,617 2,877

4. E

XCHANGE GAIN AND LOSS

During the year, there was a net exchange loss of CHF 258k compared to a net exchange gain of CHF 60k in 2014. Exchange gains and losses directly attributable to projects are dealt with under the respective projects.

EURO (47) (5)

Norwegian Krone (179) (10)

US Dollar (32) 75

Foreign exchange gain/(loss) (258) 60

Interest/Other 7 0

Financial income/(expenditure) (251) 60

5. P

ROVISIONS FOR

S

TAFF

T

ERMINATION

,

L

EAVE AND

R

EPATRIATION

Provisions for staff termination are amounts set aside to cover the Ramsar Convention in case of unplanned termination of indefinite staff contracts leading either to legal costs or redundancy payments or other costs not otherwise budgeted for.

Management recommends a target of 10% of annual salary, which at the end of 2015 was estimated at CHF 89k (in 2014 was estimated at CHF 128k). Additionally, there is a termination legal case on going at the end of 2015. The estimated future cash outflow of this termination is CHF 138k. The total termination provision is CHF 227k for 2015 (2014 was CHF 128k).

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Provisions for staff repatriation 124 128

Provisions for staff leave 165 123

Provisions for staff termination 227 128

Total 516 379

6. C

ONTRACTING

P

ARTY

R

ECEIVABLES

,

NET

Gross membership dues receivable 1,349 943

Provision against dues in arrears (691) (483)

Net membership dues receivable 658 460

Provision against dues in arrears is calculated as per the policy stated under Note 2(xi).

7. O

THER

R

ECEIVABLES

Prepayments 79 -

Staff travel advances and loans (2) -

Withholding tax 1 2

Rent guarantees and sundry receivables 10 9

Total 88 11

8. O

THER

P

AYABLES

Membership prepayments 525 671

Accounts payable 81 185

Pension and insurance payables 24 (17)

Total 630 839

9. A

MORTIZATION

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10. S

WISS

G

OVERNMENT

T

AX

R

EBATE

Non-Swiss staffs are exempt from paying taxes on their IUCN earnings on the basis of a Fiscal Agreement between IUCN and the Swiss Government, which entered into effect on 1st January 1987. In order to ensure equitable treatment of both Swiss and non-Swiss staffs, an internal tax is levied on non-Swiss staff resident in Switzerland. This is shown as Retained Swiss Income Tax and is classified as unrestricted income.

11. U

NRESTRICTED

R

ESERVE

F

UND

The movement in the reserve fund is as follows:

Opening balance 709 709

Deficit for the year (337) 459

Transfer of surplus (deficit) reserve to Restricted Funds - (459)

Closing balance 372 709

12. P

ROJECTS

F

INANCED BY

R

ESTRICTED

F

UNDS

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- 13 - Appendix A: PROJECTS FINANCED BY RESTRICTED FUNDS

For the period of 1 January 2015 to 31 December 2015 (CHF ‘000s, includes rounding errors)

in thousands of Swiss Francs (CHF '000s)

Balance (deficit) at

31 December 2014 Income during 2015 Expenditure during 2015 Project Transfers, Cross charges Balance (deficit) at 31 December 2015

(DR)/CR (DR)/CR (DR)/CR (DR)/CR (DR)/CR

Regional Initiatives

RI - WACOWET 32 17 - - 49

RI - CARIWET 23 - (6) 10 26

RI - HA (1) - (2) 3

-RI - Mangrove 26 0 (28) 11 9

RI - LA PLATA 6 - (22) 15

-RI - East Africa Centre 28 - (1) - 27

RI - Niger River Basin Network 12 - (46) 42 8

RI - Carpathian Wetlands Initiative 4 - (8) 6 3

RI - Black and Azov Sea Coast - - - 3 3

Total of Regional Initiatives 130 17 (113) 90 123

International Cooperation

SGF-1997 4 - - (4)

-SGF-2005 4 - - (4)

-SGF-2006 47 - - (47)

-SGF-2007 16 - - (16)

-SGF-2008 43 - (14) (29)

-SGF-2009 60 - - - 60

SGF 2010 145 - (11) (80) 53

SGF-2011 (75) - (15) 129 39

SGF-2013 (22) - - 50 28

SGA-2003 5 - - (5)

-SGA-2005 46 - - (46)

-SGA-2006 86 - - (86)

-SGA-2007 23 - - (23)

-SGA-2008 50 - - (50)

-SGA-2009 36 - (7) (29)

-SGA-2010 46 - - (46)

-SGA-2011 80 - - (80)

-SGA-2012 66 - (50) (16)

-SGA-2013 (36) - (20) 72 17

SGA-2014 12 - (3) (9)

-WFF-Exchange 36 - - 51 87

WFF-2001 (1) - (1) 2

-WFF-2002 5 - - (5)

-WFF-2005 14 - - (14)

-WFF-2006 37 - - (37)

-WFF-2007 53 0 (8) (45)

-WFF-2008 16 - - (16)

-WFF-2009 (62) - - 62

-WFF-2012 139 0 (11) - 128

WFF-2013 (17) - - - (17)

WFF-2014 108 - - (11) 97

WFF - 2015 - 84 - - 84

RI Central Asia (Norway) - 9 (0) - 9

Danone Ecole de l'eau 43 - (23) - 21

Danone 2014 141 0 (52) (59) 30

Danone Spring 10 - - - 10

Total of International Cooperation 1,155 93 (214) (388) 647

Listed Sites

RAM 41 0 (6) 25 60

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- 14 - Appendix A: PROJECTS FINANCED BY RESTRICTED FUNDS

For the period of 1 January 2015 to 31 December 2015 (CHF ‘000s, includes rounding errors)

in thousands of Swiss Francs (CHF '000s)

Balance (deficit) at

31 December 2014 Income during 2015 Expenditure during 2015 Project Transfers, Cross charges Balance (deficit) at 31 December 2015

(DR)/CR (DR)/CR (DR)/CR (DR)/CR (DR)/CR

Other

Admin 7 - 123 495 625

2014 Surplus 459 0 (184) (275)

-RSIS redevelopment 124 - (102) 80 102

Web redevelopment 5 - (22) 70 53

Development 86 - (76) - 10

Science Review 33 0 - - 33

Strategic Plan 2016 22 - (4) - 18

SC48 translation/interpretation 66 1 (49) - 18

COP12 Translation (FOEN-CH) - 100 (41) - 59

SC51 - - (136) 142 6