Tdh annual report 2012 by Plan Nederland

Terre des Hommes 2012 Annual report

Table of contents

4. The results from the programmes

Foreword 3 Report from the management board 5 Report from the Supervisory Board 7 Mukta and Julian's year 9 Rosario and Dotto's year 10 Annual summary 11

1. Terre des Hommes 1.1 Terre des Hommes in brief 1.2 Key data 1.3 Background 1.4 Areas where we work 1.5 Vision and Mission 1.6 The Terre des Hommes approach

2. Explanation of policy and strategy 2.1 Future vision: policy 2012-2015 2.2 From north to south 2.3 Fundraising 2.0 in the Netherlands

3. The primary processes 3.1 Fundraising and communication 3.2 Funding 3.3 Partner policy and capacity increase

13 14 14 14 15 15 16

17 18 19 19

21 22 26 30

4.1 Child exploitation 4.2 Education 4.3 Healthcare 4.4 Independence 4.5 Emergency aid 4.6 Micro-loans

5. organisation 5.1 Structure and personnel 5.2 Quality system 5.3 Risk management and control 5.4 Planning and control

6. Budget 2013 Budget 2013

7. Annual accounts 2012 Annual accounts 2012 General explanation and principles of valuation and determining profit/loss Principles of valuing assets and liabilities Explanation to the balance sheet as at 31 December 2012 Explanation to the statement of income and expenditure in 2012 Key HR figures Net result from volunteer groups

35 38 39 41 43 45 51

53 53 58 60 62

63 64

65 67 68 69 72 76 81 82

Audit statement from the independent accountant 84 Organogram 85 Table of countries 86

2 | Terre des Hommes Annual report 2012

Foreword Seventy years ago, the French author Antoine de Saint-ExupĂŠry, who serves as our inspiration, wrote that the Third World does not exist. His message is still relevant. After all: there is but one world and that world belongs to everyone. Terre des Hommes believes that all children have the right to a fair existence. In 2012 we saw against the backdrop of a declining economy in the Netherlands, people became more critical about the benefits of international collaboration. At Terre des Hommes too, we see that we are having to become even more creative, work harder, collaborate more and invest more in order to organise our activities. Like our founder, we have a sacred belief in responsibility and solidarity for every individual. In the countries where we operate, we are also seeing the local communities increasingly take on more responsibility. With some 221 projects in seventeen countries, we are working with our project partners to give shape to de SaintExupĂŠry's ideal of an honest world. We are stopping child exploitation so that victims can make a new start. In 2012, thousands of children were rescued from situations of exploitation. Take Mukta for example, one of the children from our projects. She is just ten years old and works in a shoe factory in Dhaka. Because of the long, labour-intensive days she has problems with her eyes. Our local partner SEEP runs special schools for working children, one of which Mukta also attends. She is learning to read and write

there and receives help from SEEP to do less heavy and intensive work. The ultimate aim is of course that the children stop working all together. And we are doing our very best to get there. In 2012, Terre des Hommes was again able to count on the loyal and untiring support of some 1,450 volunteers who work in the shops or in volunteer groups. It is fantastic to see that there are enough people ready to help in every city where we open a shop. To make our fight against child exploitation even more successful, we need help and commitment in the countries where we operate. It was with good reason that Terre des Hommes in 2012 again passed greater responsibility to the local partners. We want them to also raise funds in their own country from the upcoming and higher classes. Our aim is that by 2016 forty per-cent of expenditure will be covered by regional fundraising.

today. We can't do all this without the support of our donors, volunteers, sponsors, institutional donors and the National Postcode Lottery. Thanks to them, we are able to work towards a world without exploitation in which children can reach their full potential! Albert Jaap van Santbrink

Director of Terre des Hommes

With our knowledge and local staff, we inspire and support our partners in developing their plans and achieving their aims. We are convinced that this approach will be success. Our partners and local people demonstrate enormous energy and vigour. And that in turn gives us inspiration. The Third and First world no longer exist. North and south are inextricably connected and very much need each other in working towards an honest world. Terre des Hommes plays a key role in this connection because we do more than any other body to monitor children's rights and fight for a just world. Antoine de Saint-ExupĂŠry's ideal is still relevant

Terre des Hommes Annual report 2012 | 3

4 | Terre des Hommes Annual report 2012

Report from the management board Changing role In 2012, thanks to Terre des Hommes, 103,947 children attended school, 51,978 children and pregnant women received extra food and 12,061 people obtained a loan to start their own business. This is just a selection of the results in 2012. See chapter 4 for a detailed overview. We need to collaborate with local organisations if we are to achieve our objectives. The role we play in raising funds will change in the years ahead. In 2012, we started to make local partners aware that they also need to take personal responsibility for raising funds. The number of project partners will decline in the years ahead. We will pay greater attention to a number of large project partners and at the same time focus on better mutual collaboration. This more efficient and effective way of working requires intensive support, monitoring and control on the part of project partners. Income and expenditure Revenue in 2012 increased in comparison with 2011. Total revenue in 2012 was approx. 22.9 million euro. In 2012, expenditure was around 19.9 million in line with our targets. Expenditure on fundraising, management and administration was approx. 4.4 million euro. A detailed justification of our expenditure and costs can be found in the financial

section of this annual report. Subsidies Together with our partners Stichting Liliane Fonds and Stichting Kinderpostzegels, we form an alliance known as ‘Child and Development’. As part of MFS-II (Joint Financing Scheme 2), this alliance will receive government grants of €32.8 million during the period 2011 – 2015. In 2012, expenditure was 8.9 million euro. Expenditure in 2011 was accounted for and approved in 2012. In 2012, Terre des Hommes was accountable for its expenditure in 2011 to the Ministry for Foreign Affairs. The budget for 2013 was approved by the Supervisory Board. National Postcode Lottery The National Postcode Lottery and Terre des Hommes have enjoyed a loyal and positive relationship since 1996. In 2012, Terre des Hommes received a fixed sum of €2.25 million from the National Postcode Lottery. The ‘Break the Chains’ project (dealing with human trafficking) - paid for as an additional project in 2009 - was completed in 2012. During this period, three project partners in South-East Asia (Cambodia, Laos and Thailand) were able to help 792 girls and women into open houses thanks to the support of the National Postcode Lottery. Furthermore, 523 girls were taken into three safe haven centres, 73 more than originally planned. Terre des Hommes and its three partners will continue to help these girls since the issues have not yet been resolved. We will continue to provide our support until such time that our partners are able to continue independently. In

2013, Terre des Hommes received an additional €4.72 million on top of the fixed contribution so that we could implement two additional projects. Cooperating Aid Organisations Terre des Hommes is a member of the Cooperating Aid Organisations (which from its Dutch title is abbreviated to SHO). The SHO administration saw no reason for joint emergency aid in 2012. SHO emergency aid in Haiti came to an end. Terre des Hommes did however provide independent emergency aid to its local partners in the Philippines, Bangladesh, Uganda, Indonesia, Thailand, Lebanon and Burkina Faso in the wake of floods, landslides and armed conflict and other events. €1 million was spent on this emergency aid. Terre des Hommes International Federation Terre des Hommes is a member of the TDHIF (Terre des Hommes International Federation) which has 11 member organisations. The management board is made up of the directors of the five member organisations, including Terre des Hommes Netherlands. TDHIF has an independent chairman. Albert Jaap van Santbrink, director of Terre des Hommes Netherlands, is the vicechairman. TDHIF has an international coordinating office (4 FTEs) in Geneva. Sustainability One of the core principles of Terre des Hommes is sustainability. Interventions aimed at our target group must result in a long-term impact, ongoing improvements and continuity. Sufficient capacity for partners is also important so that they can carry on with their main activities independently.

Terre des Hommes Annual report 2012 | 5

Results take root sooner if the people needing help are themselves closely involved in their own development activities, and if these activities are aligned with their own environment. Furthermore, this integrated approach is an important requirement when it comes to sustainability. A problem such as child exploitation cannot be addressed with just one single method. It demands different strategies, such as education for vulnerable children, micro-loans for parents and lobbying to governments. It is all this together that maximises the chance of effective and sustainable results. Engaging with and being accountable to various stakeholders such as parents, government and teachers supports sustainability and helps the results to become embedded. Substantial funding Substantial funding from various sources guarantees the sustainability and continuation of our projects. Terre des Hommes is able to rely on financial support from a range of parties concerned, including some 84,000 benefactors, volunteers, sponsors, institutional donors and the National Postcode Lottery. Sustainability is also important to Terre des Hommes as an organisation. We encourage our staff to use public transport. We also offer employees the opportunity to work from home one day a week. When renovating our office in 2012, we reduced CO2 emissions by using sustainable materials and, for example, halogen lighting. Our thanks here go to the sponsors of the renovation: Boksman bouwbedrijf, Hanic vloerenbedrijf, INOFEC, Verhuisbedrijf Passies, Verkaart Group, Copaa afbouwsystemen, Complex, BBM schoonmaakdiensten and WIAR.

6 | Terre des Hommes Annual report 2012

Child Protection Policy Other important aspects of our sustainability policy are the Child Protection Policy which all employees - including those in the region - must sign to guarantee the safety of children involved in our projects. Furthermore, Terre des Hommes applies an anti-corruption and safety policy which sets out the safety of our employees. We also invest in training our staff in the regional offices in order to further improve their personal development. Quality and marks of quality The Project Partner Capacity Assessment Tool helps our project partners to formulate their objectives, record their progress and differentiate between the weak and the strong organisational aspects. Terre des Hommes supports its project partners as effectively as possible in setting up and delivering the programmes in order to guarantee quality. We have further sharpened the Foreign Affairs monitoring and evaluation protocol so that we can subsequently account effectively for the results of our work. Terre des Hommes also holds the CBF quality certificate for fundraising institutions and ISO 9001:2008. In addition, Terre des Hommes has ANBI status. This means that the government recognises us as an institution for general benefit (algemeen nut beogende instelling, ANBI).

To close Some good outcomes were achieved in 2012, the reorganisation is largely completed and our role as a specialist in the field of child exploitation has been given clear shape. Thanks to the support of some 84,000 benefactors, several sponsors and equity funds, hundreds of donors, volunteers, the Ministry for Foreign Affairs and the National Postcode Lottery, we are able to help hundreds of thousands of children to a safe environment in which they can continue to develop. Albert Jaap van Santbrink Director, Terre des Hommes Netherlands The Hague, 27 March 2013

Report from the Supervisory Board The Supervisory Board is the highest decision-making body within the Terre des Hommes Netherlands Foundation. The Supervisory Board approves or rejects the policy put together by the board and also assesses its implementation. The Terre des Hommes Supervisory Board is made up of six people. Each member of the Supervisory Board is appointed for a period of four years by existing members of the Supervisory Board and may be reappointed twice. The members of the Terre des Hommes Supervisory Board receive no remuneration â&#x20AC;&#x201C; not even for any travel costs they incur - and have no business relationship with Terre des Hommes. If the Supervisory Board wishes to bring in a new member - in accordance with the guidelines set out - the outline profile for the position in question must be recorded and advised to internal and external stakeholders . This takes place on the basis of the composition of the rest of the Supervisory Board, the Supervisory Board profile and on the basis of analyses of developments that are important to Terre des Hommes.

Composition of the Supervisory Board in 2012 Name

Management role and profile

Board member since

Social function

R. S. (Ron) Ton

to 19/12/12: Chairman of the Supervisory Board

2000

Director Clingendael Academy

R.A. (Rob) Ruijter

to 19/12/12: Member and Chairman of the Financial Audit Committee from 19/12/12: Chairman of the Supervisory Board

2003

Various positions including Wavin NV, Unit 4 NV and Ziggo NV

P.W.M. (Paul) Nobelen

Vice-chairman HR affairs

2004

Management consultant

D.C.M. (DaniĂŤlle) Smits van Waesberghe

Member Communication

2005

Marketing and communication consultant

A.G.J. (Arent) van Wassenaer

Member Financial Audit Committee Legal affairs

2009

Lawyer/partner with Allen & Overy LLM

L. (Lousewies) van der Laan

to 19/12/12: Member

2011

Vice-chairman of the European Liberal Democrats

P. (Pim) Oomens

from 28/11/12: Member from 19/12/12: Chairman of the Financial Audit Committee

2012

Former CFO and Senior Vice President Wavin NV. (as at 01-02-2013 member of the executive Board of Stork Technical Services Holding BV).

Terre des Hommes Annual report 2012 | 7

Tasks of the Supervisory Board • approve the Terre des Hommes annual plan and the multi-annual strategy, including the associated budget and the necessary investments • supervise execution of the strategy and achievement of the objectives • approve the Terre des Hommes annual accounts and annual report • approve and amend the management regulations • approve changes to the terms of employment policy

The performance of the members of the Supervisory Board and the management board At the end of the year a private Supervisory Board meeting is held in which the performance of the Board members is assessed. In 2012, the assessment took place on 28 November. The Supervisory Board is satisfied with the way of working and performance in 2012. The performance of the director is also discussed in this meeting in preparation for the annual evaluation meeting. This evaluation meeting is led by a member of the Board. The meeting in which the director received positive feedback on his performance took place at the beginning of January 2013. Remuneration Committee The Supervisory Board's remuneration committee determines the salary paid to the director. The Supervisory Board deems the director's salary to be in line with the weight of the role which entails managing 98 employees at home and abroad and being tasked with generating and responsibly spending, for example, €19.2 million in 2012. The director's salary was not adjusted in 2012.

8 | Terre des Hommes Annual report 2012

Role and working method of the board Director Albert Jaap van Santbrink provides direction to the Terre des Hommes Netherlands Foundation and passes responsibility to the Supervisory Board. He is responsible for strategy, policy implementation, external representation and the organisation of personnel. The director issues a report to the Supervisory Board every quarter, during the Supervisory Board meetings. Activities in 2012 The Supervisory Board met four times in 2012 (28/3, 22/6, 31/10 and 28/11). The members of the Supervisory Board also had an informal meeting with the regional representatives during a session held on 18 September. During this period, the regional representatives spent a number of days in the Netherlands to discuss the new annual plan with the board and management team and to reach annual agreements with the director. The audit committee, made up of two representatives of the Supervisory Board, met twice with the director and the financial director to discuss the annual accounts for 2011 and the budget for 2013. In addition to approving the annual documentation (annual report, annual accounts for 2011 and the annual plan 2012 which was formally approved in June 2012), the Supervisory Board also discussed the following topics: a. MFS-II developments b. Governance: review of the director, self-evaluation of Supervisory Board performance and board membership

c. Management of liquid resources d. Fundraising, strategy and positioning e. Presentation to the National Postcode Lottery f. New ICT system g. Various programmes and projects where the Supervisory Board grants approval for projects of more than €30,000 h. Discussion of the accountants' report 2011 as drawn up by the accountant i. Discussion and approval of the annual plan 2013 j. Progress reports with respect to execution of the annual plan 2012 k. Correction of salaries for price inflation in 2013 Optimal use of resources Via the strategy memo and the multi-annual budget and the resulting annual plans and budgets, the Supervisory Board provides direction to Terre des Hommes objectives. The implementation of activities is monitored and evaluated through a critical assessment of the annual report. With respect to the internal processes, the Supervisory Board provides major support to the accountant's findings, the ISO and CBF certifiers, the findings of the Financial Audit Committee and the Ministry of Foreign Affairs. Optimal relationships with stakeholders Terre des Hommes provides a clear picture of how its financial resources are used. We communicate this via the annual report, (digital) newsletters, sponsor reports, folders, the magazine, meetings, social media and the internet.

Customer satisfaction As part of this, Terre des Hommes operates in accordance with the set complaints procedure 5.4 (Quality Manual; Complaints in the Netherlands) and in the region in accordance with complaints procedure 5.5 (Quality Manual; Complaints in the region). This approach is proving effective. Assessment of the risks and risk management The Supervisory Board closely monitors the risks and degree of risk management within the organisation. Internal control within Terre des Hommes is sufficient. Accountability statement This annual report is drafted in accordance with the Central Bureau of Fundraising (CBF) regulations for fundraising institutions as issued by the Council for Annual Reporting. The Supervisory Board's accountability statement forms part of this guideline. The accountability statement forms an integral part of this Supervisory Board report.

Mukta and Julian's year Child worker Mukta can always turn to her teacher “I Mukta, I am 10 years old and I work in a shoe factory in Dhaka. I don't like it because the work really hurts my eyes. I enjoy going to the SEEP school. My teacher is really lovely and I have lots of friends. The best thing about it is that I can read better now. I sometimes even read the newspaper but I don't understand all the difficult words. Fortunately, my teacher always helps me.” Partner organisation SEEP has special schools for working children. The organisation also aims to improve working conditions in the factories. SEEP is looking for a job for Mukta that won't be as harmful to her health.

Finally, the Supervisory Board would like to thank the management board, employees, volunteers, benefactors, sponsors, institutional donors, the National Postcode Lottery and the Terre des Hommes ambassador Frans Weisglas for their commitment and achievements over the past year. Rob Ruijter on behalf of the Supervisory Board of the Terre des Hommes Netherlands Foundation, chairman The Hague, 27 March 2013

Mukta

Julian Julian: from refuse worker to children's rights ambassador Julian, who comes from Jakarta, spent many years working at a landfill site. He wanted to go to school but to his great regret this was not possible (see corporate video on www.terredeshommes.nl). Around two years later, his life is looking much better and he goes to school. 10 December 2012, Human Rights Day, was a very special day for him. During a meeting in Jakarta, the children's rights ambassador spent a day talking about his life as a child worker. Julian also had an important message: “Children should not do any heavy work. They must attend school.” Julian goes to school thanks to our partner YPSI which focuses on education for the very poorest children in Jakarta. Young people are given vocational training and children's rights are explained to parents.

Terre des Hommes Annual report 2012 | 9

Rosario's teacher praises her “My name is Rosario, I am 10 years old and in the fifth class. At my old school, my teacher beat me because I couldn't read. I was sad and scared and didn't dare to go to school any more. Fortunately, a lady from Chasqui helped me. I learned to read and write at Chasqui. My teacher said I was good at it. I really enjoy it and have lots of friends.” In El Alto, a suburb of La Paz in Bolivia, Chasqui provides refuge and education to children from poor families. These children often leave school with no diploma. Chasqui offers them extra lessons, explains children's rights and involves parents in their children's education.

Dotto Dotto finds safe haven following abuse “The burns on my feet were very painful. They got me away from home and took me to a doctor. In the hospital, I had an operation. I can live here until I am completely well again. My wounds are being taken care of and I am given food. I am safe here and I go to school. I am in group 3. I love running around in the garden here and playing football with my friends. I want to be a pilot when I'm older.” Dotto (9) is currently living in the refuge run by our partner Foundation Karibu in Mwanza, Tanzania. His family is receiving therapy to prevent a repeat in the future. Once Dotto returns home, Karibu will continue to keep a close eye on things.

Rosario

10 | Terre des Hommes Annual report 2012

annual summary

Rosario and Dotto's year

Groningen shop launches Terre des Hommes cook book From Indian curry to Brazilian ‘Bobo de the Terre des Hommes cook book March Camarao’: contains 68 delicious recipes from the countries in which we work. The book also provides information about our projects. Minister Opstelten calls for prohibition on travel for sex offenders Minister Opstelten, the Minister for Justice, is calling for a prohibition on travel for June convicted sex offenders. His appeal lends an ear to the appeal by Terre des Hommes for more stringent supervision of this group of society. Mayor Aboutaleb donates his time to shop in Rotterdam Mayor Aboutaleb, Terre des Hommes ambassador Frans Weisglas and director June Albert Jaap van Santbrink open Rotterdam shop. Each of them has promised to spend one day a year helping in the shop. Rally drivers reach Great Wall of China with a cheque for €124,476 Participants in The Hague-Beijing Challenge 2012 have raised an enormous €124,476 for Terre des Hommes. Terre des Hommes June ambassador Frans Weisglas accepted the cheque at the Great Wall of China. 'Anti-Child Pornography Day' in Cebu Terre des Hommes launches an aid process for child prostitutes in the streets of Cebu City in the Philippines. The city's administration August is pleased with the action and has declared 1 August to be the 'Day against Child Pornography'.

Lilet Never Happened at Dutch Film Festival The film Lilet Never Happened, which was partly funded by Terre des Hommes, is competing at September the Netherlands Film Festival in Utrecht in a bid to win a Golden Calf. Children's rights petition attracts 10,000 signatures Some 10,000 people sign petition for children's rights in foreign policy. Director Albert October Jaap van Santbrink was among those who submitted the petition to the Dutch House of Commons. Regional Director Lei Brouns passes away On Tuesday 13 November, our regional director for South Asia, Lei Brouns, passed away at November the age of 66. We will miss our colleague hugely. 3JS take part in the Angkor Wat Bike Race 3JS take part in the Angkor Wat Bike Race in Cambodia The participants took gold for Terre December des Hommes and our partner Village Focus International which takes in victims of human trafficking. Net profit from Terre des Hommes shops approx. 1.1 million euro The 34 Terre des Hommes shops achieve a December net profit of around 1.1 million euro in 2012. Together with 1,450 enthusiastic volunteers, we are aiming for 50 shops by 2015.

Terre des Hommes Annual report 2012 | 11

12 | Terre des Hommes Annual report 2012

1. Terre des Hommes Terre des Hommes Annual report 2012 | 13

1.1 Terre des Hommes in brief Target group Our target group is vulnerable children aged up to 18. Vulnerable children are children who are socially, economically, physically or culturally marginalised, such as children who are victims of exploitation, violence or abuse (for example working children, child prostitutes, child soldiers), children living in extreme poverty, children with a handicap, children from ethnic minorities, street children and children who are direct or indirectly affected by HIV/AIDS. There are several million vulnerable children worldwide. Organisation Terre des Hommes has one member on its management board and works with a staff of 31.9 FTEs at the head office. In addition, 64 people work in the field. The Supervisory Board supervises and acts as sparring partner to the director. Terre des Hommes is a member of the Terre des Hommes International Federation (TDHIF) which was founded in 1966. The TDHIF has a coordinating role between the member organisations. The members operate independently under the name Terre des Hommes.

14 | Terre des Hommes Annual report 2012

Revenue Terre des Hommes raises its funds from a variety of sources. First of all, there are the donations from individuals. In 2012, some 84,000 benefactors donated some €6 million (not including income from legacies). Profit from the 34 Terre des Hommes shops was €1,196,332. We received €535,308 from the business market Furthermore, we have since 2003 formed part of the Dutch government's joint financing scheme. Terre des Hommes forms an alliance with 'Stichting Liliane Fonds' and 'Stichting Kinderpostzegels'. In the period from 2011 to 2015, the alliance will receive 32 million euro. Another source of our income is the annual contribution from the Dutch National Postcode Lottery. Fifty per cent of the National Postcode Lottery tickets sold are allocated across 83 good causes. In 2012, we received a contribution of €2.25 million.

1.2. Key data

Collaboration Since it was founded in 1989, Terre des Hommes has been part of the Cooperating Aid Organisations (SHO). Terre des Hommes is also a member of Partos, the sector organisation for Dutch organisations operating in the field of development collaboration. Terre des Hommes is also part of the Children's Rights Collective. Finally, Terre des Hommes and its partners Stichting Liliane Fonds and Stichting Kinderpostzegels forms the ‘Child and Development’ alliance which receives a grant as part of MFS-II (Joint Financing Scheme 2).

Our name - Terre des Hommes - comes from the book of the same name by the French writer Antoine de Saint-Exupéry (best known for the novel Le Petit Prince). Terre des Hommes was founded in Switzerland in 1963, with Dutch volunteers following the example in 1965. It was initially set up as an aid organisation but the focus later was on structural development to prevent child exploitation. Terre des Hommes has grown to become a prominent and independent child support organisation. We defend the rights of children and fight against child exploitation. The United Nations Convention on the Rights of the Child forms the basis of our work. We offer assistance without making a distinction based on race, religion, gender or political affiliation.

• • • • • • • • • •

Head office professionals 34 (31.9 FTEs) Regional offices 4 Regional employees 64 National offices 12 Local partner organisations 221 Countries we work in (including emergency aid in Haiti) 17 Volunteers 1,450 Donors 84,469 Income €22,960,292 Expenditure €24,383,762

1.3. Background

1.4. Areas where we work We operate in 17 countries across four regions in South-East Asia, South Asia, East Africa and South America. The head office is in The Hague. We operate in: • South-East Asia: Cambodia, Indonesia, Philippines, Thailand, Laos, Burma • South Asia: Bangladesh, India, Sri Lanka • South America: Bolivia, Brazil, Peru • East Africa: Kenya, Tanzania, Uganda, Ethiopia • Haiti (emergency aid)

1.5. Vision and mission Vision A world in which children are no longer exploited. We will continue until such time that we achieve this. Mission Terre des Hommes stops children from being exploited, removes children from exploitive situations and ensures that these children are able to develop in a safe environment.

Terre des Hommes Annual report 2012 | 15

Prevention

1.6. The Terre des Hommes approach Because our aim is to resolve child exploitation in a structured way, we not only help victims, we also address the root causes of the problem. Our approach consists of prevention, protection and legal assistance for victims. We also put children's rights on the public and political agenda.

In order to prevent child exploitation, we invest in education and information for both children and adults. As poverty is the main cause of child exploitation, we offer parents the possibility to increase their income through savings and loan groups.

Protection

Legal assistance

Children who are victims of exploitation require protection. We provide shelter, medical care, therapy, training, while assisting them to build an independent future. We also counsel family members and involve the communities in the protection of children.

It is important that victims are able to come forward themselves and that the perpetrators of exploitation do no go unpunished. We therefore help children to file complaints. They can count on legal support and assistance in case of criminal prosecution. We also train local police and the judiciary.

Lobby

We are committed to children's rights. We campaign to call attention to children's rights and perform research in order to identify trends and developments in the field of child exploitation and to place them on the agenda. We also follow and influence the decisions of local and national governments, industry and international organizations (such as the UN), and we call for the implementation of these decisions. In order to ensure that child exploitation is prevented and that victims receive the appropriate aid.

16 | Terre des Hommes Annual report 2012

2. Explanation of policy and strategy

Terre des Hommes Annual report 2012 | 17

2.1 Future vision: policy 2012-2015 General Terre des Hommes' policy is based on the strategy memo which is in place for a 5-year period. The latest Strategy Memo covers the period from 2011 to 2015. The Terre des Hommes strategy is expressed in three main objectives in the area of programmes, organisation and fundraising, with sub-targets for each area. Our core aim is to stop child exploitation. The Strategy Memo is centred around Terre des Hommes strengthening its position as a specialist in the area of, and an expert adversary of child exploitation. Fundraising, communication, business operations and HR policy are supporting activities which help to achieve this key aim.

18 | Terre des Hommes Annual report 2012

Development of the organisation LEAN Management Following the reorganisation in 2011, we started with further development of the organisation in 2012. In the knowledge that government grants are not guaranteed and that they may even disappear as a potential source of funding, we are working towards an organisation that is able to continue without MFS-II as a source once this is no longer available. Using LEAN Management (process improvement) technologies, processes are reviewed to enable the organisation to operate more efficiently and more effectively. This also involves strengthening the regional offices and needs to result in the offices being able to operate largely self-sufficiently and independently. To get there, we have worked on simplifying and streamlining the decisionmaking and responsibility processes within the organisation. Being able to link funding to outcomes should provide donors of funds with greater insight into how the money is spent and the results achieved. To this end, we have started an ICT project. ICT In 2012, we started to explore the IT landscape and prepare an inventory needs. This inventory takes into consideration future needs in the area of internal and external communication, responsibility and reporting. Fundamental here is the ability to link quantitative and qualitative results to income.

In 2013, we will complete the inventory and makes choices with respect to the software and ICT platform. This will be followed by implementation. Recording data at source will result in a more efficient organisation with even greater emphasis on monitoring and evaluation. Planning and control The Terre des Hommes planning and control cycle consists of: • Strategy memo: the Terre des Hommes multiannual plan for the period from 2011 to 2015 • Annual plan: refinement of the Strategy Memo based on the current situation • Annual budget: this is put together in the 3rd quarter of each year for the following financial year • Monthly reports for the management team and all employees of Terre des Hommes • Annual accounts: prepared every year in the first quarter for the previous financial year

Using a new ICT system, we aim to make the qualitative outcomes of aid available more efficiently and faster and to link these outcomes to financial data. In 2013, we will use a Balanced Scorecard which will make data available in the field of finance, organisation, customers and innovation. This will enable us to drive our organisation more effectively. The Balanced Scorecard will be further aligned with information requirements during the course of 2013 and will form part of the implementation of a new system.

2.1.1. Future vision: Policy 2012 - 2015 In all four regions in which we operate, our approach centres around allowing vulnerable children to grow up in a safe environment. In the period from 2012 to 2015 Terre des Hommes aims to: • support 500,000 children and meet their basic needs so that they can grow up in a safe environment • free 25,000 exploited children from the situation they are in and help them with education, healthcare and socio-economic support • help at least 400,000 vulnerable children to prevent them from ending up in situations of exploitation • help 50,000 families to improve their income • help 200,000 women with healthcare in the context of pre- and post-natal care in order to combat child mortality • make 2,000,000 people aware of their rights and how they can claim entitlement to them, the rights of children and prevent child exploitation.

own countries and to make their own contribution there. We are seeing that emerging economies are all too happy to take responsibility in terms of their development work. Which is just what Terre des Hommes aspires to. In places where local organisations are keen to get started themselves, we support them by putting together development plans, training courses and education. As soon as a partner has demonstrated the ability to do the work themselves, we withdraw in a responsible manner. Our partners are professional and understand our approach, which takes account of cultural and social contexts. They have a realistic view of the world which is changing apace. It is important to the management of Terre des Hommes that they must have the loyalty, energy and enthusiasm between our current donors, the regions, partners - but first and foremost the children we aim to help - high on the agenda. After all, we will not stop until the world is free from child exploitation!

2.2 From north to south

2.3 Fundraising 2.0 in the Netherlands

From north to south is a frequently heard term in development collaboration. This means the southern organisations taking greater responsibility. Terre des Hommes therefore also works with local partners. Lobbying and influencing policy also encourages local governments to take responsibility for development processes in their

Retaining donors and attracting new donors is becoming an increasingly interesting task for Terre des Hommes. Annual research into awareness of our name and satisfaction surveys repeatedly show that we have a particularly loyal supporter base. We are very grateful to everyone for this - after all what is a good club without committed members? However

the competition is becoming increasingly fierce. Other parties are entering the fundraising market and development work in particular is coming under pressure. Given the current economic tide, we are noticing that the market doesn't need any more traditional requests for donations. Continuing on the well-trodden path is therefore not the right way forward. In 2012, we consciously focused on our supporters. We asked them what they like about us and what we could improve. The results of this research shows that Terre des Hommes has a positive future ahead. After all, we have a strong starting point thanks to our donors, good programmes in the regions and a healthy dose of enterprise. We are optimising the connection with our existing supporters and in attracting new donors in the Netherlands we are investigating new ways of giving and involving people and gaining loyalty in the market segments where we are strongly represented. We now have more than forty years' fundraising experience which makes us a good source of knowledge and experience for our regions in helping them on the path to local fundraising. We are a small, agile and professional with short reporting lines which allow us to switch quickly when we see opportunities.

Terre des Hommes Annual report 2012 | 19

20 | Terre des Hommes Annual report 2012

3. The primary processes Terre des Hommes Annual report 2012 | 21

3.1 Fundraising and communication Fundraising Aim of fundraising and communication The whole organisation agrees about the aim of Terre des Hommes: together with our benefactors we are aiming for a world free from child exploitation. We do what we do because all children have the right to an honest future with some hope. A future where they can use their talents and enjoy life. In the countries where we work, there are unfortunately many wrongs. Children who are being exploited and abused. Our basic humanitarian principles mean we can't allow that to happen. Through research, lobbying, intervention and education, we try to as far as possible to maintain a foothold within governments, educational and care institutions and communities. Through our partners, we save children from situations of exploitation and protect them from it. We also help governments and children to successfully bring cases against the perpetrators. It is intensive yet honourable work as our regional director for South-East Asia Leny Kling explains. “You sometimes see dozens of children and know that you can only save a handful of them. But that handful will encourage other children to also stand up against abuse.” Approach in 2012 and focus for 2013 Private market Following in-depth analysis from fundraising,

22 | Terre des Hommes Annual report 2012

we in 2012 intensified the connection to our private supporters. Individual supporters receive 72 newsletters, 3 Terre Magazines and 4 tailored mailings annually. Partly through setting up the Terre des Hommes DenkLab (a donors' panel with 682 members) we have obtained better insight into our donors' wishes. For example most donors prefer concise information received online. The respondents also said that they would like to hear and read more about Terre des Hommes in the media. We don't just want to 'issue' information, we are increasingly seeking dialogue with our supporters. In 2012, this resulted in some lovely meetings with our donors. We are very grateful to our current supporters for helping us to eliminate child exploitation from the world. Our primary aim for 2013 is to strengthen and intensify this connection.

“My Christian conviction is that you have to take responsibility for other people. But I am pleased that Terre des Hommes is neutral and is not religious. Together we are responsible for our earth, our planet.” Bert Roebert, donor since 1989

Figures for the individuals market 2011

2012

Target for 2013

Number of donors (ongoing and one-off donations)

87,540

84,469

87,500

Number of terminations

19,974

15,204

11,000

Number of new donors

11,108

12,132

13,500

Average donation

€ 68.55

€ 71.53

€ 75

Companies Collaboration with companies is becoming increasingly important to Terre des Hommes. In January 2012, 75 students embarked on a vocational training course in Tangail, Bangladesh with the help, among others, of ASML Foundation, the Frits Schrouff Foundation, the GSRD Foundation and the Marthe van Rijswijck Foundation. At the end of 2012, a second centre for vocational training was opened in Mirpur, also in Bangladesh, supported by both the GSRD Foundation and the ASN Foundation (see box). Bridge V.O.F. supported the 'Operatie Hartslag' (Operation Heartbeat) project and introduced Terre des Hommes to some interesting contacts during an inspirational day of sailing on the IJsselmeer. Foundation 10 September linked to D.E. Master Blenders has supported the Asas do Socorro project in Brazil's Amazon region where bush pilots fly small planes to bring healthcare to inhabitants of remote riverside communities. We are particularly grateful to the companies that support our work. In addition to the ones mentioned above, these

include 3M, C&A, Redevco Foundation and Sweex. Terre des Hommes' revenue from business increased by almost sixty per cent in 2012.

“The Terre des Hommes projects are well aligned with the problems facing the local population. Improving children's living conditions and stopping child exploitation through education, healthcare and independence certainly requires greater support.” Radj Jhinkoe, ASN Foundation

Equity funds The international equity funds market is highly dynamic. In the Netherlands, Terre des Hommes notes that it is a challenge to find the right funds and consent to submit proposals. Since June 2011, this task has been covered as a separate role. We of course focus on funds which are in favour of primary development collaboration and preventing child exploitation. The number of contacts with equity funds is increasing as is the size of the donation. We are noticing - quite rightly - that equity funds require ever more detailed information from the projects they are supporting. Furthermore, like the companies, we want to understand what makes our projects and programmes sustainable in the longterm. As part of our sustainability vision which is explained in section 2 we work hard to provide evidence in our proposals and methods.

Equity fund figures Company figures 2011

2012

Number of companies

Number of new companies

-1

Total revenue

€ 287,286 € 535,308

Target for 2013

Number of equity funds Number of new equity funds

€ 950,000

Total revenue

2011

2012

-6

€ 260,180

€ 141,316

Target for 2013

National Postcode Lottery Terre des Hommes has been receiving a contribution from the Dutch National Postcode Lottery since 1996. In 2012, we received a contribution of €2.25 million. Donations from the National Postcode Lottery have helped to facilitate projects such as APLE (prosecuting paedophiles in Cambodia), CWCC (refuge foe victims of sexual abuse in Cambodia), hospital ship Abaré (healthcare to river communities in Brazil's Amazon region) and 'Operatie Hartslag' (Operation Heartbeat) (life-saving operations for young heart patients in Kenya).

"Terre des Hommes is a small and professional organisation which works with local partners on innovative and new projects. Through education, healthcare and micro-loans, Terre des Hommes improves the lives of children who are trapped." Judith Lingeman, head of good causes, National Postcode Lottery

€ 800,000

Terre des Hommes Annual report 2012 | 23

Terre des Hommes shops, our volunteers Our volunteers and with them our recycling shops are the pearls of our Terre des Hommes organisation in the Netherlands. Our shops' positioning in the market is: First choice for second-hand. Among our target audience of buyers, we are known as a shop with good items (clothing, books, household goods and children's toys) at an excellent price. More than 1,450 selflessly dedicate themselves every day to Terre des Hommes, particularly in our shops. Together they generate more than 1 million euro net per annum. This amount goes directly to a project selected by the shop. We now have 34 Terre des Hommes shops in the Netherlands. In 2012 we opened four new shops in Rotterdam, Enschede, Haarlem and Arnhem and set up one shop (Apeldoorn) with a planned opening at the beginning of 2013. At least six openings are planned in 2013. Over the next year, we aim to increase awareness of our shops and involve them in the market prospecting campaigns. We are aiming for minimum 50 highly profitable shops in 2015. In addition to the volunteers in the shops, we also have our promotional working groups in Heemskerk, Driebergen and Arnemuiden. They take part in collections, stand at markets and street fairs and organise clothing fairs. It is fantastic that people commit themselves selflessly to Terre des Hommes so that together we can stop child exploitation in our regions.

24 | Terre des Hommes Annual report 2012

“It was a privilege to visit projects in Nairobi and see the loving care given to young victims of abuse. It's wonderful to see children's dull eyes sparkling again.” Rineke Scholten, shop coordinator in Zwolle since 2005

Of note in 2012 • Shop anniversaries in Leeuwarden, Helmond and Emmen. • Two new shop promoters (volunteers) to achieve growth of the shop. • Standard package of promotional materials (including stickers and posters) developed for the shops. • From 1 July 2012, Terre des Hommes shops have been subject to VAT. There were four treasurers' meetings in order to maintain correct administration. Furthermore, an automated accounting package was introduced which the shops will start using in 2013. • Legal case in Assen with respect to fraud on the part of the treasurer. The judge ruled that the perpetrator must repay €2,400 of the €3,300 stolen. • National Management Boards Day on Saturday 2 June in Utrecht for all management boards. 26 of the 34 shop management boards attended. • National Terre des Hommes Volunteers' Day in Apeldoorn for all volunteers on Saturday 22 September. The attendance level of less than 10% was disappointing. Following evaluation, we will adapt the formula.

COMMUNICATION Via publicity campaigns and promotions we inform the Dutch public about our work and create great incentive to give/do something. The aim is ultimately to raise funds so that we can protect as many children as possible from exploitation. In 2012, we asked people to turn their attention to the issue of child cyber sex. This included a special cross-border campaign as part of the Redirect project: people in the Netherlands were able to help with an escape route for child prostitutes in the town of Cebu in the Philippines. This town is known for its growing number of child prostitutes, particularly in the online sex industry. In terms of funds, the campaign unfortunately raised less than expected. But in terms of raising awareness of the problem in the Philippines it was a success. The campaign drew in around five thousand children and families. The campaign also generated free publicity to and the attention of local and national media. “It was the first time there had been such open recognition that child prostitution is a major problem in a town like,” says Leny Kling, regional director for South-East Asia. “The escape route gives prostitutes a way out of the taboo and thanks to our campaign, 1 August was declared a ‘Day Against Child Pornography’. Together with the town's administration we are going to do all we can to eradicate this problem from the world!” Petition for children's rights In 2010, Terre des Hommes worked closely with UNICEF, War Child, Save the Children and a further 20 children's aid organisations to ensure children and their rights have a permanent place in Dutch human rights and foreign policy. The 24 organisations called for Dutch

citizens to sign an online petition. People could also sign a paper petition form in the Terre des Hommes shops. This resulted in more than 500 signatures. On behalf of the organisations, Paul van Vliet in October passed more than 10,000 signatures to the members of the permanent Parliamentary Committee for Foreign Affairs. The petition and comments were packaged in a symbolic child's rucksack, in other words: ‘homework ’ for the new Chamber! Terre des Hommes Denklab Terre des Hommes believes it is very important to keep existing donors up-to-date with its work: the ‘why’, the approach, the challenges and the results. Some of the ways we do this are via the website, the donors' newssheet Terre Magazine, the digital newsletter, social media and, since 2012, through meetings. Given that there are always improvements to be made to our communication, in 2012 we launched the Terre des Hommes DenkLab. The participants - made up of donors, volunteers and interested parties - take part in short online research 4 to 6 times a year and receive subsequent reports on the outcomes and specific actions to be taken by Terre des Hommes and areas where it can improve. This happened three times in 2012. One of the things this revealed is that respondents have the feeling that Terre des Hommes can make a difference with their support. They are also satisfied with the communication but want to see more of us in the media. We are actively working on this last point!

informed about our work and our achievements in the fight against child exploitation. In 2012, Terre des Hommes appeared in the news following the release of Bas R. in Cambodia (paedophilia), child cyber sex and the Redirect campaign in the Philippines. The press trip about child cyber sex to Cebu in the Philippines was organised in May for journalists from NRC, Volkskrant and GPD. The press trip was a success. The Volkskrant, NRC and many regional newspapers published vivid stories about young children forced to perform sexual acts in front of the webcam. In 2012, the Terre des Hommes name appeared 311 times in regional press (2011: 289). The top three publications were Barneveldse Krant (34), BN de Stem (14) and the Provinciaalse Zeeuwse Courant (12). The reports resulted in various positive reactions from donors and some companies. A selection of the results: National TV • Hart van Nederland SBS – release of Bas R. • Happiness commercial set in Cambodia by the National Postcode Lottery and Terre des Hommes

Newspapers • Release of Bas R. in Cambodia – including Nu.nl, Reformatorisch Dagblad • Child cyber sex – De Volkskrant, NRC, GPD-dagbladen • Project Redirect in Cebu – including Telegraaf and Metro

Radio 1 Publicity Attention in national and regional media is very important for Terre des Hommes. It keeps the public

• National Postcode Lottery thank you commercial with Frans Weisglas

Terre des Hommes Annual report 2012 | 25

Terre des Hommes ambassador Former President of the House of Representatives Frans Weisglas has been ambassador for Terre des Hommes since August 2009. A role he fills very enthusiastically and without remuneration. In 2012, Frans Weisglas again committed enthusiastically to Terre des Hommes. He opened new Terre des Hommes shops, presented Terre des Hommes at various meetings, led debates for Terre des Hommes and as ambassador recorded commercials for the National Postcode Lottery. In addition, he in 2012 again donated ten per cent of all his activities on www.fransweisglas.nl to Terre des Hommes. We are delighted to have his input and would like to thank him wholeheartedly for his commitment to our work.

3.2 Finance General In order to utilise and maintain its assets, Terre des Hommes applies the following principles; • Terre des Hommes maintains a current account balance with banking institutions which are supervised by De Nederlandsche Bank N.V. • Terre des Hommes does not invest its resources in shares, bonds or other investment products including derivatives • Terre des Hommes applies yield objectives based upon risk avoidance and inflation correction • Terre des Hommes spreads its liquid resources across a variety of banking institutions

Continuity reserve Terre des Hommes maintains a continuity reserve to cover short-term risks and to ensure that future liabilities can be met. This item is explained in greater detail in the annual accounts. Earmarked reserves Terre des Hommes has set aside part of the reserves to finance a special aim. These are assets used to achieve the objectives and to finance micro-loans. Funds Terre des Hommes has two funds: a historical notarial deed of donation and an unspent sum for emergency aid in Haiti. This item is explained in greater detail in the annual accounts.

26 | Terre des Hommes Annual report 2012

Reserves Available to achieve the objectives Disposable assets available for direct expenditure on the objectives was €4.3 million at the end of 2012 (2011 €5.4 million). Liquid assets The composition of liquid assets at the end of 2012: 2012

2011

Current accounts

1,819,960

2,745,789

Savings accounts

6,413,869

4,524,638

Deposits

9,119,745

15,000,000

17,353,574

22,270,427

Total

Terre des Hommes enters into multi-annual commitments and maintains reserves in order to meet future liabilities. Total Terre des Hommes liabilities at the end of 2012 were €15.8 million. The progression of liquid assets in 2012 is explained in the a annual accounts together with a summary of cash flow. Income from interest in 2012 was €418.630 (€599,265 in 2011). This fall in income is due to a declining balance of liquid assets and lower interest rates in 2012.

Historical summary of yields 2012

2011

2010

2009

2008

416,654

413,893

407,381

901,042

1,093,636

2.1%

1.7%

1.6%

3.2%

4.1%

1,607

38,785

164,425

-217,991

0.0%

13.0%

29.5%

-11.5%

416,654

415,500

446,166

1,065,467

875,645

Total yield

2.1%

2.4%

2.3%

4.2%

3.5%

Interest on micro-loans

1,977

183,765

203,288

248,227

233,584

418,630

599,265

649,454

1,313,694

1,109,229

Interest on liquid assets Yield Investment result Yield Total result

Total income from investments

approximately €2.8 million during the period. This project was completed in 2012 and no sums were received. Detailed information about the project in Haiti can be found in section 4.5 of the annual report. Government grants, Joint Financing Scheme (MFS-II) Together with Stichting Kinderpostzegels and the Liliane Fonds, Terre des Hommes forms the Child and Development alliance. The total amount of grant allocated for the period 2011-2015 is €32.8 million. Terre des Hommes will assign this entire grant to projects in East Africa. At the end of 2012, Terre des Hommes had 81 projects underway in East Africa. Overview of recognition of income and expenditure joint financing scheme 2011 – 2015

Income General The budget for 2012 shows an income entry of €24.6 million. This was a healthily ambitious budget which, due to changed market circumstances, could no longer be considered realistic. Expectations for 2012 have been modified and now based on the 2011 level. The ultimate surplus (+ €4.7 million) compared with 2011 is the result of higher MFS-II commitments (+ €3.8 million and higher income from our own fundraising activities (+ €1.4 million). On the other hand, income from joint campaigns and income from interest fell by €0.5 million. Own fundraising Income from our own fundraising increased by €1.4 million in 2012 compared with 2011. This increase was primarily due to higher income from legacies

(+ €1.1 million). Income from fixed contributions, campaigns and spontaneous donations remained virtually unchanged. Income from business institutions increased by €157,000 compared with 2011. Total income from the Terre des Hommes drinks (volunteer groups) increased by approximately €106,000 compared with 2011. Terre des Hommes has 34 shops and 10 promotional teams (2011: 29 and 10), primarily in medium-size cities in the Netherlands. Income from the shops is explained in more detail in the annual accounts. Income from joint campaigns In 2010, the Cooperating Aid Organisations (SHO) launched a campaign to raise funds for the victims of the earthquake in Haiti. In 2010, Terre des Hommes started a project in Haiti which generated

2012

2011

8,799,315

4,986,804

86,569

52,587

8,885,884

5,039,391

Transfer to alliance partners

2,713,213

1,689,875

Commitments

5,733,783

2,733,571

56,792

237,137

328,174

53,922

50,634

8,885,884

5,039,391

MFS-II subsidy Interest on grant Total MFS-II income

Monitoring costs Overhead Coordination costs Total costs Surplus/deficit

Terre des Hommes Annual report 2012 | 27

In 2012, a total of €6.5 million was received from the Ministry for Foreign Affairs. The interest on this amount was €86,569 at the end of 2012. This interest is also being used to finance the programmes in East Africa. Since the grant was allocated at a later stage, not all funds had been spent on programmes in East Africa by the end of 2011 In the 2nd half of 2012 there was an effort to catch up which resulted in higher commitments in 2012 which cleared the deficit that was present at the end of 2011. The costs of transfer to the alliance partners in 2012 are accounted for in these annual reports under the item: Ongoing aid in East Africa. Income from interest and investments Income from investments comprises interest on liquid assets and interest on micro-loans.

Expenditure Expenditure on objectives Ongoing aid In 2012 Terre des Hommes supported 241 (2011: 232) project partners (some partners have multiple projects) of which 141 project partners in 2012 (2011: 130) and had new funding allocated. Terre des Hommes works on an ongoing basis in 15 countries. In 2012, €16.1 million was committed to ongoing aid, €0.9 million less than estimated and €2.5 million more than was committed in 2011. Compared with 2011 €3.8 million more was committed to Terre des Hommes MFS-II projects. Furthermore, an amount of approximately €1.1 million more was transferred

28 | Terre des Hommes Annual report 2012

to the alliance partners compared with 2011. In South Asia, expenditure in 2012 was approximately €3.1 million lower than in 2011. Part of this amount (€1.0 million) relates to the release of earlier commitments to the MEC project in India. Since an increasing proportion of this project can funded from own income, earlier commitments now appear to be too high. This fits with the Terre des Hommes aim to help project partners to gain independence. Emergency aid and rehabilitation In 2012, Terre des Hommes committed approximately €1.0 million to emergency aid. Emergency aid is explained further in section 4.5 of this annual report. Emergency aid projects financed with their own funds have been launched in the following countries: • • • • • • •

Bangladesh €50,000 Burkina Faso €154,580 Philippines €56,048 Indonesia €28,985 Lebanon €130,000 Thailand €508,174 Uganda €20,351

Implementation costs own organisation aid The own organisation's aid delivery costs increased by approximately €350,000 compared with 2011. Costs in the Netherlands remained the same while the costs in the regions increased. Awareness/explanation of the costs and fundraising In 2012, the costs of raising awareness/education

fell from approximately €1.2 million in 2011 to approximately €1 million in 2012. Direct costs in particular fell as a result of review of the media activities. Fundraising costs increased by approximately €265,000. Fundraising has become more difficult in the current market conditions which means more effort is needed to maintain the level of income. Ratios Ratio

2012

2011

2010

1 Expenditure on objective/income

87%

93%

81%

2. Expenditure on objective/sum of expenditure

82%

79%

80%

3. Management and administration costs/ total expenditure plus change in micro-loans

5.0%

5.5%

5.8%

4. Costs of own fundraising/Income from own fundraising

23.5%

24.1%

24.4%

5. Total income excl. Subsidies/total income

61.3%

72%

66%

6. Own organisation execution costs/Income

32.2%

37.8%

24.4%

7. Own organisation aid execution costs/ Ongoing provision of aid and emergency aid/ rehabilitation

11.6%

11%

12.2%

1,2,3 Ratio spent on objective and ratio of management and administration costs One of the things that Directive 650, which Terre des Hommes applies, introduces is the ratio spent on objective and the ratio of management and administration costs. Paragraph 423 of RJ 650 includes an additional requirement regarding a compulsory ratio which shows the ratio of expenditure on objective as a percentage of all expenditure. These ratios indicate what proportion of the income/expenditure was spent on the objective. The amount spent on objective in accordance with the statement of income and expenditure is multiplied by the movements in microloans. The standard for the ratio of management and administration for the period 2012 - 2015 has been set by Terre des Hommes at 5%. 4. Ratio: CBF cost of fundraising percentage This ratio indicates the cost of own fundraising compared with income from own fundraising. The Central Bureau for Fundraising uses as a maximum standard an average cost percentage of 25% over the previous three fiscal years. This ratio fell by 0.6% compared with 2011. The increase in income from legacies is to blame for this. 5. Ratio: Ministry for Foreign Affairs, own contribution 2011 was the first year of the Joint Financing Scheme 2011 - 2015. The grant arrangement expects the grant recipient to raise minimum 25% of the total income. With a percentage of 61.3%, Terre des Hommes easily complies with this standard. The fall in the ratio is cause by the fact that total income

excluding grants increased by less than the total income. The ratio for 2012 is estimated at 68%.

Cost group

Percentage

Aid costs (part of the objective)

6. Ratio: Organisation overhead This ratio reflects the relationship between overhead and income and provides information for monitoring changes in overhead costs. The implementation costs increased by approximately €0.5 million, while income increased by €4.7 million. As a result, this ratio fell considerably compared with 2011. 7. Ratio: Aid overhead. This ratio verifies the overhead associated with the provision of aid. This ratio increased slightly in 2012. Expenditure on ongoing aid and emergency aid/rehabilitation (excluding shop costs) increased in comparison with 2011 (+ €2.3 million). The own organisation aid execution costs (excluding volunteer group costs) increased by approximately €350,000. A summary of total aid costs can be found in the countries' table.

Cost of raising awareness (part of the objective)

16.2%

Cost of own fundraising

18.0%

Cost of joint actions

5.2%

Cost of third-party campaigns

2.4%

Cost of obtaining government grants

The majority of the Terre des Hommes overhead is allocated across the cost groups according to this percentage. The table below shows the cost allocation percentages.

11.0%

Cost of investments Management and administration

1.2% 38.8%

A number of cost items are charged in full to one of the groups above. This is shown in the table below. Costs

Allocated in full to

Payment transaction costs Cost of investments

On the basis of Directive 650, Terre des Hommes uses eight cost groups. A cost allocation percentage is calculated based on the actual personnel numbers and the time employees spend on the various activities. These percentages were not changed for 2012 compared with 2011 because the relative deployment of staff did not fundamentally change compared with the previous year.

7.2%

Management and administration Cost of investments

MFS and EU subsidy costs

Cost of grants received

Quality monitoring (ISO)

Aid provision costs

Aid provision travel and administration costs

Aid provision costs

Research into children's rights

Aid provision costs

Other project costs

Aid provision costs

Cost of regional offices

Aid provision costs

Cost of shops (volunteers' groups)

Awareness-raising and fundraising costs

Terre des Hommes Annual report 2012 | 29

All marketing and communication costs have their own allocation key. These costs are allocated between awareness-raising and fundraising.

3.3. Partner policy and capacity increase 3.3.1. Partner policy Terre des Hommes works from the philosophy that projects are best conceived and implemented by local partners. After all, they understand goes on in a community and what help is most needed. Our partners' employees come from these communities and therefore enjoy the population's trust. The grassroots principle whereby people on the ground take their own initiatives - rather than this being done by the policy-makers or outsiders - is key here. What is the significance of this principle to the collaboration between Terre des Hommes and our locale partners? When selecting our partners, the key criteria are financial reliability, safety for children and sustainability. • Financial reliability: the funds we raise for our projects must be spent effectively and honestly. Good prior screening of the financial housekeeping and regular audits are the tools we use to guarantee this. • Children's safety is central to all our projects. All our partners are therefore required to sign the Child Protection Policy which, for example,

30 | Terre des Hommes Annual report 2012

guarantees that a child is never alone in a room with an adult. Protecting children against the most serious forms of child exploitation means that their safety within our projects takes the highest priority. • Sustainability of our partners. Terre des Hommes aims for its partners to work independently so that they can ultimately continue their projects without our help. Terre des Hommes supports each project for a period of three years. The support may be extended after this time. Projects have clear and concrete objectives with demonstrable results. Following completion of a project, Terre des Hommes may elect to support another project by the same partner. 3.3.2. Capacity increase A capacity increase is needed to achieve sustainability of our partners. Through training, we help our partners to become more professional and independent. For example many partners find networking, lobbying and influencing policy as well as raining funds themselves something of a challenge. Training is needed in this area to help them so that they can strengthen their position. Another way of increasing our partners' capacity is by supporting more projects by the same partner. This increases efficiency because the partner is familiar with how we work. For example in Cambodia we support our project partner Cambodian Women’s Crisis Center (CWCC) in Siem Reap which offers safe haven to young girls and woman who are the victims of sexual exploitation. As well as Siem Reap,

we support another project from this partner in Banteay Meanchey in the North-West of Cambodia on the border with Thailand. Terre des Hommes will intensify this work over the years ahead. Assessment of the project partner's management capacity In delivering its programmes and projects, Terre des Hommes operates in accordance with a model whereby authority is delegated. In the four regional offices (South-East Asia, South Asia, East Africa and South America with their associated national offices), we have regional representatives to manage local staff. The regional representatives are responsible for the organisation and internal management of the regional office and all programmes. The project partner management is responsible for putting together the project proposal and, following approval by the Terre des Hommes, for delivering the projects/programmes within the frameworks of the agreed contracts. The regional representatives' responsibilities are set out in the Regional Representatives Manual. This manual also indicates what criteria a Terre des Hommes project partner must meet. Prior to entering into an agreement with a project partner, we test the project partner's management capacity. The partner organisations must be reliable and capable as evidenced among other things by a clear organisational structure, transparent accounting and compliance with legal obligations. The partner organisations must be capable of providing financial and factual reports and evaluating the

outcomes of the project activities with Terre des Hommes or another agency. Project partner's accountability The project partner is financially accountable to the regional office. This accountability comprises elements: an interim financial quarterly report and an annual accountant's report. In 2012 Terre des Hommes provided financial support to 241 project partners (of which 14 cases were emergency aid). In 2011 financial support was given to 232 project partners (of which four needed emergency aid). These 241 partners are have their headquarters in 16 countries. They received â&#x201A;Ź14.5 million (2011: â&#x201A;Ź14.0 million). The number of partners we work with in terms of ongoing aid has increased (2012: 241; 2011: 228).

Terre des Hommes Annual report 2012 | 31

Number of project partners still required to provide accountability for part of 2012 and amounts still to be accounted for; by project partners per region:

Financial reporting by the project partner At the end of February 2013 we gauged for how many months the project partners still needed to provide accountability. 20 project partners (2011: 29) had still not provided accountability by the end of February 2013 for an amount of €412,914 (2011: € 600,000) relating to part of 2012.

Number of partners end February 2013

Amount still to be accounted for at the end of February 2013

Number of partners end of February 2012

Still to provide accountability amount at the end February 2012

South-East Asia

197,062

352,034

South Asia

50,562

East Africa

106,103

87,072

59,187

161,532

412,914

600,638

Region

South America Total

Number of partners per region still required to submit accountability for more than three months of 2012:

We expect our project partners to report on actual expenditure as quickly as possible at the end of each quarter. Where in 2012 project partners have not yet provided full accountability, this is generally speaking in relation to the final quarter. Below is a summary per region of the number of project still required to provide accountability for a period of more than three months.

32 | Terre des Hommes Annual report 2012

Region

Number of partners end February 2013

Number of partners end of February 2012

South-East Asia

South Asia

East Africa

South America

Total

* 4 project partners are still required to submit accountability for more than three months of 2012 pertaining to an amount of €126,500. Last year there were two partners and the amount was €44,271.

Accountant's audit for project partners In accordance with our regional Representatives Manual, the regional representative must ensure that an accountant audits every project. In accordance with the Quality Manual (NEN-EN-ISO 9001: 2008) the accountants' reports must be submitted to the head office. The table below shows the number of accountant's reports received out of the compulsory audits. By the end of February 2013 Terre des Hommes had received an accountant's report from 99% ( 2011: 97%) of the partners. Three accountant's reports are yet to be received. We will receive these reports during the course of 2013. The percentage of accountant's reports received increased slightly compared with the annual report for 2011. We will closely monitor our internal control in this area in 2013. Accountant's reports received 100 80 60 40 20 0

2008

2009

2010

2011

2012

Percentage of accountant's reports received compared with the number of compulsory accountant's reports.

South-East Asia Cambodia Philippines Indonesia Laos Thailand South Asia

Percentage audited in 2012 Reference date February 2013

Percentage audited in 2011 Reference date February 2012

98%

91%

100% 100% 96% 100% 100%

100% 89% 88% 100% 92%

98%

Bangladesh India Sri Lanka

100% 100% 89%

East Africa

100% 100% 100% 100%

99%

98%

Kenya Tanzania Uganda

97% 100% 100%

100% 100% 95%

South America

100%

Bolivia Brazil Peru

100% 100% 100%

99%

97%

Total

An accountant's report may cover a period that is the same as the project period. Since the project period may not be the same as a calendar year it is possible that only part of the calendar year 2012 is included in the accountant's report. It may also be the case that having an accountant's report

prepared in a legal requirement in the country in which Terre des Hommes is operating. This is the case in Bangladesh, India and Sri Lanka. In some countries, the period for which an audit statement must be obtained is different from a calendar year. For example in India, the financial year runs from April through to March. Operational audits On instruction from the board, the operational audit team reviews local compliance with the Terre des Hommes manuals. One in which this is tested is via interviews with the regional representative and the local staff and by taking random samples from the project files. The audit team usually comprises the head of finance and a project employee from the head office. The programme of these operational audits is set out in the operational audit manual. In 2012, audits were completed in South America and South Asia (2011: East Africa and SouthEast Asia). In South-East Asia a team from KPMG participated in the operational audit in as part of the review of the operational audit team's activities and in order to make their own observations. Sanctions policy Once a project request is approved at the head office, the contract between Terre des Hommes and the project partner is signed. The Quality Manual sets out the measures to be applied in the case of breach of the contract. If the project partner fails to meet the contractual obligations, the regional representative must submit a request to the head of finance to suspend payments to the

Terre des Hommes Annual report 2012 | 33

project partner. The regional representative then launches an investigation and decides whether the problems have been resolved and payments can resume. If the problems are ongoing, the regional representative submits to the head of programmes a recommendation with evidence to terminate the contract (early). The head of programmes then submits the early termination to the board for approval. The regional representative ensures, if possible, that project funds still held by the partner are transferred to the regional office. In 2012 two cases of fraud were uncovered, one Peru where an amount of â&#x201A;Ź3,200 went missing. The project partner has now repaid Terre des Hommes. The second case was of suspected fraud in Laos. An audit of these two project partners is planned for February 2013 to determine whether there really is something amiss. In 2012, one contract was terminated early (2011: 4). In addition to early termination, there is the possibility that the agreement with the project partners will not be extended on completion of the project. This happened 80 times in 2012 (2011: 63 times). Below is a summary of the number of agreements not extended ranked by reason and region. Risk management among project partners On 19 September 2012 there was an ISO audit of the Terre des Hommes head office. Throughout this audit, the table referred to above was examined in detail. It was established that Terre des Hommes

34 | Terre des Hommes Annual report 2012

Number of agreements not extended per region with project partners and partners posing a risk Reason

SouthEast Asia

South Asia

East Africa

South America

Total 2012

Total 2011

Financial mismanagement

Insufficient profit

Does not fit with MFS 2010 - 2015

Project able to continue with own resources

Extension not sufficiently recommended

Sufficient other donors

Weak partner

Of which prematurely

Number of partners with risk

221

232

1.5%

5.6%

Project completed

Total number of partners not extended

Total number of partners supported Percentage of partners with risk

faced a risk with three project partners in 2012. These are the partners reported under: financial mismanagement (1), extension not sufficiently recommended (2). In 2012 Terre des Hommes supported 221 partners. This means that we faced

a risk with 1.5% of the partners. In 2011 the figure was 13 out of the total 232 partners, a percentage of 5.6%.

4. The results from the programmes Terre des Hommes Annual report 2012 | 35

Child Exploitation

Worldwide, millions of children are the victim of exploitation, with thousands of children joining them every day. They are forced to work, are the victim of human traffickers or are exploited in the sex industry. Terre des Hommes frees children from situations of exploitation and prevents children from becoming the victims of exploitation. Education is one of the key ways of preventing exploitation. Our approach is broken down into the following elements: • • • •

Lobbying Prevention Protection Legal aid

See page 16

36 | Terre des Hommes Annual report 2012

Healthcare

Education

Children who attend school have the best chance of a good future. Thanks to the skills they learn at school they are able to develop into empowered people. A child that attends school is able to defend is able to stand up for itself and therefore runs less of a risk of exploitation. We ensure that children attend school and train teachers in child-friendly teaching methods. Because in many countries, it is the teacher not the child that is central and the teaching material provided is not tailored to the interests of the child. Unfortunately, physical and/or sexual violence against children is still all too common. This is one of the main reasons for children leaving school early. Parental support is also crucial in getting children to school and keeping them there. Terre des Hommes therefore undertakes a lot of activities to show parents the importance of education and actively involve them in all the ins and out of the school.

In many countries where Terre des Hommes is active, children die from diarrhoea and malnutrition. Prenatal and postnatal care is also often sadly lacking. Terre des Hommes invests in preventive and curative healthcare to improve the health of pregnant women, mothers and children. Investing in health allows children to develop properly both physically and mentally which reduces their risk of becoming a victim of ill-treatment and exploitation.

Emergency aid

In 2012, Terre des Hommes provided emergency aid in the Philippines, Bangladesh, Uganda, Indonesia, in the border area between Burma and Thailand, in the Lebanon and in Burkina Faso. In addition, emergency aid as part of the SHO (Cooperating Aid Organisations) in Haiti has come to an end.

Independence

Micro-loans are for many people the only way of escaping the cycle of poverty. Terre des Hommes encourages women in particular to set up savings and loans groups so that they can together save money and grant loans to start their own businesses. a higher family income means children no longer need to work and are able to attend school. In addition to micro-loans, we also invest in vocational training courses. Once they have completed a vocational training course, young people can start their own business and earn their own income.

Terre des Hommes Annual report 2012 | 37

4.1 Child exploitation Millions of children worldwide are the victim of exploitation. They work as domestic slaves to foreign families where they are expected to work long days and are treated like dirt. Or they do dangerous and exhausting work in factories, quarries or at waste disposal sites. They are treated like a commodity and girls in particular are forced into the sex industry. Terre des Hommes frees children from situations of exploitation with a holistic approach involving: Lobbying: we lobby governments to fight child exploitation, focus on influencing policy and make the local population aware of children's rights and the dangers of human trafficking. Prevention: the most effective method of protecting children from exploitation is education. A child that attends school learns to stand up for itself and has less chance of being forced to work. The child is also less at risk of becoming the victim of human trafficking. Thanks to the skills the children learn at school they are able to develop into empowered people. With vocational training, children later have the opportunity to earn their own income. Protection: we protect victims in safe havens and offer psychological assistance to help them work through their traumas. Legal assistance: we offer children who are the victim of exploitation legal assistance to bring a case and prosecute the perpetrators.

38 | Terre des Hommes Annual report 2012

Vulnerable and exploited children receive shelter Legal assistance for victims Community awareness of children’s rights

Planned for 2012

Achieved in 2012

19,320

45,341

2,868

4,508

435,937

397,532

Of note A development that is cause for concern in SouthEast Asia is that many children are becoming the victim of human traffickers. It is often family members who spin the children and their parents wonderful stories about well-paid work in the city. In many cases, the children end up in situations of exploitation. The approach is difficult because the police and judicial authorities are open to bribery. The parental committees in the villages are successfully combating child exploitation. These committees are in most cases the savings and loan groups organised by local women. The members of these groups meet regularly, exchange news, take it upon themselves to protect children and make other parents aware that they need to take good care of their children. The parental committees are a great example of our approach of getting the local community to take its own responsibility for protecting children.

Focus 2013 In South America in particular – but also in other regions where Terre des Hommes works - many people consider child labour to be normal. In 2013, lobbying and influencing policy will continue to be the spearheads of our policy. We also offer education and deliver awareness campaigns in village communities in order to highlight children's rights and the danger of human traffickers. These campaigns are an appeal to parents to protect children from exploitation. In 2013, we will make additional investment in offering legal assistance to victims and prosecuting the perpetrators.

A safe shelter A simple house somewhere in an outlying area of Nairobi, Kenya. From the garden comes the sound of children's voices and laughter. Children are playing football, romping around and snoozing in the sun. They are happy and relaxed. The make-up of the ‘family’ that lives here changes on a daily basis. For example there is Chanya, a three-year-old little girl who hasn't yet learned to speak. Her mother has never spoken a word to her so she hasn't had the opportunity to learn. The scars on the children's backs and buttocks betray that they have suffered frequent abuse. Akira looks the same age, but she is already six. She is seriously malnourished, has been sexually abused and has a dull look in her eyes. Chanya and Akira are the daughters of

teenage prostitutes from the slums. Their mothers have disappeared off the face of the earth. Another young girl is 14-year old Nura who came to the city from a rural region in order to attend school. She was once forced to work as a domestic slave in her sister's meagre home and was raped by her brotherin-law. The other children who live here have all had traumatic experiences too. Loving care at WRAP Our partner Womenâ&#x20AC;&#x2122;s Rights Awareness Programme (WRAP) is one of the few agencies in Kenya that offers help to victims of sexual abuse and ill-treatment. WRAP offers the children safe accommodation and loving care. Medical care heals the physical wounds, therapy helps the children to work through their traumas and they also receive legal support to act as witness against the perpetrators. The children continue their education as far as possible. The WRAP social workers trace the children's families and ensure that they can return to live at home with their family in a loving environment. One month later. Chanya is trying to form words with her lips. She will soon be moving in with her aunt's family. Akira is almost unrecognisable with her plump cheeks and a playful look in her eyes. She too will probably go to live with her aunt. Nura has

already given evidence against her brother-inlaw and is back living with her parents in the west of Kenya. In 2012, WRAP provided a safe haven to 126 children, and 372 woman and children received legal support.

4.2 Education Education is the key ways of preventing child exploitation. Terre des Hommes directs its education programme at vulnerable children â&#x20AC;&#x201C; who face a high risk of exploitation â&#x20AC;&#x201C; and at children who are being exploited. Through our education projects we prevent children from becoming the victim of exploitation. At school, children of course learn to read, do maths and write. But they also develop their personal and social skills. Together with our local partners we ensure that children are able to attend school, that teachers use teaching methods that are in tune with the children's perception of the world and that a safe and child-friendly atmosphere reigns at school. We also involve the parents in their child's education. With a diploma, children have a good chance of pursuing suitable further education.

Planned for 2012

Achieved in 2012

87,369

103,947

Teachers trained in new teaching methods

2,881

3,559

Parents involved in the education of their child

60,626

67,154

Children learning personal and social skills

51,446

52,284

Children attending school

Terre des Hommes Annual report 2012 | 39

Of note In the areas where we work many parents have themselves not been to school. They therefore do not realise how important education can be for their children. Parents who live below the poverty line often feel they have no choice but to send their children to work. They have no other option. The money their children earn is really needed to keep their head above water. Terre des Hommes focuses on getting parents more involved in the school and how well their children are learning via education committees. Both parents and teachers are represented on these committees. It is proving to be a successful approach. Parents learn to see the benefit of education and the opportunities it bring their children. Furthermore, the education committees ensure better control so that teachers are not absent without anyone noticing. Also of note is the lack of safety within schools. Sexual abuse and violence from teachers and fellow pupils are common occurrences. Terre des Hommes therefore trains its teachers to safeguard the safety of the children at school. In East Africa, water and sanitation are a problem at schools as a result of which children run the risk of diarrhoea and worms. Our curriculum therefore focuses attention on personal hygiene and personal care. Focus in 2013 It is important to expand the education committees in all the regions. In addition, training teachers in new teaching methods and creating a child-friendly atmosphere at school are an important part of our work. Teachers who are better educated are more

40 | Terre des Hommes Annual report 2012

motivated to encourage and maintain the learning performance of their pupils. In addition, good quality education ensures that children remain motivated and leave school with a diploma. In 2013, there will be added focus on monitoring students' learning performance. Encouraging young children – when they are still infants – is also an important condition of a successful school career. Therefore in 2013, Terre des Hommes will invest more in setting up infant reception classes and pre-school education. We also provide for better local and sanitary facilities and make schools accessible to children with a handicap.

Lilis lives in the slums of Jakarta and goes to school Going to school and getting a job is top of the wish list for millions of young people in Indonesia. Poverty is the big thing that spoils this ambition. Almost 70% of all secondary school students live below the poverty line and leave school with no qualifications. Children often have to start work at a young age to supplement their parents' income. They collect waste at waste disposal sites or sell sweets or water on the streets. There is a high risk of sexual exploitation and abuse. In Jakarta, almost half the 11 million inhabitants live in poverty. Together with our local partner Yapari, we help children and their families

in five slums with education, healthcare and socio-economic development. Lilis (14) is one of them. Because her father doesn't earn enough as a builder, she was forced to leave school two years ago. Thanks to Yapari, she now attends evening school where she will obtain her primary school diploma. “After that I want to train in administration and find a job,” she says with determination. Life in the slums is not easy. Families don't have their own water, children have no space to play and infectious diseases spread like wildfire, she explains. “Everyone lives on top on each other. A lot of people in my neighbourhood have TB. When you live in a slum, you need to take good care of hygiene. I go to the Yapari centre twice a week where we are educated on hygiene, HIV/AIDS and our rights. I have lots of friends there and it's great to get together.”

4.3. Healthcare

About Yapari Our partner Yapari ensures that around 1,500 children in the slum area of Kedaung Wetan in Jakarta attend school. In 2012, 308 children attended primary school and 1,192 attended the secondary school. Yapari paid for their school fees, books, school uniform and transport to and from school. The children also receive additional lessons and education at the Yapari activity centres. The healthcare programme focused on preventing and combating TBC and other infectious diseases. In addition parents â&#x20AC;&#x201C; in particular women receive help in setting up self-help groups. With a small loan, they are able to start a business and pay their child's school fees.

Enough food for young children, pregnant women and young mothers, vaccinations against infectious diseases and malaria prevention are essential in allowing mothers and children to develop effectively. In addition, psychological assistance and therapy are needed to help children who are the victims of exploitation to work through their traumas. In many of the countries where Terre des Hommes operates, governments often make virtually no investment in healthcare, certainly in remote areas. Together with our local partners, we provide medical care via mobile clinics. We also educate village communities to make people aware of basic healthcare, including clean drinking water, family planning and education about HIV/AIDS.

Planned for 2012

Achieved in 2012

Women receive prenatal and postnatal care

32,363

43,731

Additional nutrition for children and pregnant women

36,409

51,978

Children under five by weight

23,525

34,087

Of note In the rural areas where Terre des Hommes works, healthcare is not accessible to the majority of people. In the north of Kenya or in Indonesia, people often live too far from medical centres. In addition, people frequently can't afford treatment. Other challenges include the high mortality rate among young mothers and breast-fed babies die to sicknesses such as cholera, malaria and HIV/AIDS. One development of note in 2012 was the big change in care staff at our partners in South-East Asia. Many of them are choosing to work abroad because of the higher salaries. This requires the local Terre des Hommes partners to continually make the effort to train or attract new staff. Focus in 2013 Given the positive developments in Myanmar, Terre des Hommes will from 2013 gradually run down its healthcare services at the Mae Sot refugee camps on the border. The emphasis will be on medical care in Myanmar itself. The ultimate aim is for the Burmese refugees and migrants to return to their own country. In India and Bangladesh we will provide additional training to midwives to improve the safety of childbirth. We will also focus greater attention in promoting the rights of children and women. In 2013, we will also focus on health education concerning HIV/AIDS, family planning and the prevention of infectious diseases.

Terre des Hommes Annual report 2012 | 41

Mae Tao Clinic: large-scale care Since the beginning of 1989 the Mae Tao Clinic (MTC) in Mae Sot - just across the Burmese-Thai border - has developed to become a large healthcare complex serving 150,000 Burmese migrants and refugees. Hundreds of patients visit the clinic every day. Each year, the some 600 MTC health workers treat 115,000 cases involving more than 75,000 patients. In addition to medical care, MTC also provides education as well as social and legal assistance. For example MTC ensures that Burmese babies born in Mae Sot are officially registered so that they have the same rights as Thai citizens. The support Terre des Hommes provided to MTC in 2012 comprised prenatal and postnatal care, midwifery support, and food and sanitary facilities for 5,285 patients. Terre des Hommes also supported a healthcare clinic in the Karen province of Myanmar to serve 9,974 people. Terre des Hommes also offered assistance to ten boarding schools for 556 children.

'Mae Tao Clinic is indispensable' â&#x20AC;&#x153;Among the tens of thousands Burmese refugees in Mae Sot, there is growing demand for family planning, education about HIV/AIDS and vaccinations. The Mae Tao Clinic provides this necessary healthcare. Despite the positive developments, it will take years for healthcare and education to become up to scratch in Myanmar. The Mae Tao Clinic will therefore continue to support vulnerable Burmese communities, which have for decades been the victim of internal conflicts and poverty. With the support of Terre des Hommes, we will continue with our essential activities to improve the life of refugees.â&#x20AC;? Dr. Cynthia Maung, director of the Mae Tao Clinic

42 | Terre des Hommes Annual report 2012

Saw Tha Gai's story At the age of five, Saw Tha Gai and his parents fled from their home in Myawadi, Myanmar. They ended up in Mae Sot. Saw was housed at the Mae Tao Clinic Rocky Mountain boarding centre. In the beginning he missed his parents and his brothers and sisters Fortunately everyone is nice and he quickly felt at home. Saw (13) is in the sixth class. He enjoys school: â&#x20AC;&#x153;When I have some free time I like playing football with my friends. I want to be a teacher and help other children.â&#x20AC;?

4.4. Independence Children who regularly attend school, obtain a diploma and then go on to take vocational training have the best chance of escaping poverty. Children who do not go to school go on to find poorly paid and dangerous work. This creates a new generation of people who find themselves in a vicious circle of poverty. In our approach of preventing child exploitation, micro-loans are extremely important, as is targeted vocational training. The women who organise themselves into these groups are jointly responsible and themselves monitor and control who is allowed to borrow how much money to set up a company and how the loan is repaid. As a result, the women learn to be independent, to want to set up in business and to work together. In addition, their children need to work less or not at all and are able to attend school.

Planned for 2012

Achieved in 2012

Youths in vocational training

4,028

5,380

Youths finding work after vocational training

2,236

3,695

Women setting up self-help groups

34,772

37,886

People receiving a loan for their own business

13,302

12,061

Of note Some partners in the countries where we work still offer too little choice in terms of vocational training courses and do not always align vocational training with demand from the labour market. In the countries where Terre des Hommes works, savings and loan groups enjoy great success. For example women from the lowest caste in India are learning to stand up for themselves and thanks to their own business they can leave poverty and repression behind. Their business success also helps to elevate their status. Men take them more seriously and listen to them. Finally, the savings and loan groups also play a key role in protecting children from exploitation. These women and are the eyes and ears of the community and contribute to children's safety. Focus in 2013 Vocational training in East Africa will continue in 2013 and be adapted to the market's changed needs. The vocational training courses have in the past focused too heavily on woodworking, sewing and assembly. There is often also a lack of monitoring: what happens to the young people when they have completed their vocational training course? In 2013, our partners will therefore focus greater attention on young people with a diploma and provide them with more intensive support in finding a job. In South America, the savings and loans groups programme will be extended. Our partners will also involve the savings and loans groups more closely in protecting children against exploitation. Our partners in SouthEast Asia notice that vulnerable and exploited children who are taking a vocational training course

Terre des Hommes Annual report 2012 | 43

often find it difficult to concentrate because of the traumas they have suffered. Therefore in 2013, our partners will focus added attention on providing psycho-social care to work through their traumas throughout the vocational training course.

Child orphans develop their talents Almost one in four of the inhabitants of the Central Umoya region on Lake Victoria is infected with HIV/AIDS (the national average is 7%). It's no surprise that 35% of the children there are orphans. In a region where almost three-quarters of the population lives below the poverty line children, and orphans in particular, are particularly vulnerable to abuse and exploitation. However our partner Rafiki wa Maendeleo Trust (RWMT) refuses to label them as pathetic orphans. Children have more than enough talent and ability to face the future, even if they are an orphan or live in conditions of extreme poverty. Through

44 | Terre des Hommes Annual report 2012

a range of activities, RWMT is building up these children's resistance and independence. For example they have the opportunity to add their own thoughts and make decisions about their future are they are taught through play how to take responsibility for making their own daily meal. Groups of children are given chickens and goats and have their own ‘kitchen gardens’ to provide fresh vegetables every day and they can also sell the vegetables at the market to make some money. In 2012, 1,402 children started with this small-scale agriculture and livestock farming.

Kevin and Jabes love papaya and kale from their own little garden Brothers Kevin (13) and Jabes (12) live with their mother, two sisters and another brother on a tiny plot of land. When their father died in 2010, the family lost its breadwinner. "We often had nothing to eat so it was difficult for us to concentrate at school," says Kevin And school is so important, because it determines your entire future." Now that they have a kitchen garden, there is always something to eat. Kevin also loves the fact that they are growing fruit and vegetables that you won't find at the local market, like papaya.

Jabes particularly likes sukuma wiki (kale), traditionally the most common vegetable in Kenya. He really enjoys digging in his garden. And playing football. But most of all he'd like to become a doctor. “Because there isn't a single doctor in this area,” he explains. Kevin has other ambitions. He looks up to the skies: “I dream of becoming a pilot. I would just love to fly high up there in the sky!”

4.5. Emergency aid In 2012, Terre des Hommes provided emergency aid in the following countries: Floods in the Philippines Serious floods in the capital Manilla cost 85 people their lives and affected 2.1 million Filipinos. Terre des Hommes offered 3,000 families psycho-social support, education and healthcare. Floods in Bangladesh Heavy rainfall caused floods in the north of Bangladesh in June. In the province of Kurigram, Terre des Hommes has provided aid to 2,000 families in the form of kitchen equipment such as pots, pans and stoves and has installed latrines. Landslides in Uganda Landslides following persistent rainfall hit the eastern district of Bududa in the East of Uganda at the end of June killing an unknown number of people. Terre des Hommes provided aid to 300 of the children and their families affected in the form of clean drinking water, food, school supplies, medical assistance and sanitary facilities.

Fire in Indonesia In a major fire in the outskirts of Jakarta, 60 families lost their homes. Terre des Hommes is helping the families concerned with household articles. Refugees in Burma and Thailand Many tens of thousands of refugees live along the Thai-Burmese border. Terre des Hommes has provided protection, healthcare and education to more than 25,000 children and their families Refugees in Lebanon Terre des Hommes has provided assistance to Syrian refugee children in Lebanon. Thanks to this help, 300 Syrian children have been able to attend school and have received additional lessons and psycho-social support. 400 parents and carers were involved in providing care to their children. Refugees in Burkina Faso Many tens of thousands of Malians fled to neighbouring country Burkina Faso in the wake of armed conflict between the army and rebels. Terre des Hommes allowed 2,500 children to attend school at the Ferreiro refugees' camp. Terre des Hommes also built six play areas where children from Mali were able to play with children from Burkina Faso.

Terre des Hommes Annual report 2012 | 45

4.5.1 Haiti On 12 January 2010, Haiti was hit by a severe earthquake. An estimated 220,000 people lost their lives and more 300,000 people were injured. One-and-a-half million people were left homeless and the heavily populated capital Port-au-Prince lay in ruins. The Netherlands really got behind the aid campaign for Haiti which was launched on 21 January 2010. Including the contribution from the Minister for Development Collaboration, this aid campaign raised a total of €111.6 million for the people affected in Haiti. The Cooperating Aid Organisations (SHO) are managing the money raised by the aid campaign and 15 Dutch air organisations, including Terre des Hommes, are dedicating the resources to emergency aid and on regeneration in Haiti. Terre des Hommes did not receive any more money for this project in 2012 (in 2011 it received €309,053). The emergency aid was directed towards 125,000 people, 83,000 of them children to the west of the capital Port-au-Prince and in the south of Haiti. SHO The SHO comprises the following nine organisations which in 2012 spent the money on the basis of an allocation key: Cordaid Mensen in Nood Dutch Red Cross Oxfam Novib Unicef Netherlands ICCO and Kerk in Actie

27.53% 20.43% 16.87% 13.43% 12,84%

46 | Terre des Hommes Annual report 2012

Save the Children Terre des Hommes World Vision Tear

2.88% 2.62% 1.79% 1.61%

Ten per cent of the total income is reserved for the guest participants Habitat for Humanity, Care Nederland, Plan Nederland, VNG International, the Salvation Army and Dorcas. Terre des Hommes and the Haiti campaign Terre des Hommes is a member of the Terre des Hommes International Federation (TDHIF). Six years after Terre des Hommes was founded in Switzerland, other European organisations under the same name founded the International Federation of Terre des Hommes in 1966. This federation plays a coordinating role between the member organisations. The members operate independently under the name Terre des Hommes but consult one another regularly to collaborate on campaigns and carry out emergency aid activities. For example in Haiti, Terre des Hommes Netherlands is working with Terre des Hommes Lausanne because our Swiss sister organisation has been active in Haiti for some 20 years. The Terre des Hommes programme in Haiti is directed at around 125,000 people, 83,000 of them children. Additional attention is focused on vulnerable children and their families. The programme is being delivered in Leogane, Grand Goave, Petit Goave and Les Cayes by 20 international and 261 including 65 volunteer - local workers. In total, Terre des Hommes approved a programme for an amount of €2,736,455 (including accountant costs to carry out an audit). This programme ran until the end of June 2012.

a. Selection and choice of implementing organisations In delivering its programmes and projects, Terre des Hommes Netherlands operates in accordance with a model whereby authority is delegated. In the four regional offices (SouthEast Asia, South Asia, East Africa and South America), Terre des Hommes has regional representatives to manage the local staff. These regional representatives are responsible for internal management of the projects within the organisation of the regional office. Management of the local implementing organisation is responsible for putting together the project proposal and, following approval by the board, for delivering the projects and programmes within the frameworks of the agreed contracts. Terre des Hommes Netherlands does not operate in Haiti on an ongoing basis. Terre des Hommes Lausanne, headquartered in Switzerland, acts as the local executing organisation and executes the projects itself. Just as with local project partners, Terre des Hommes Netherlands has signed an agreement with Terre des Hommes Lausanne and assessed the management capacity. As part of Cooperating Aid Organisations (SHO) activities, such as Iran (2003), Sudan (2004) and Pakistan and India (2005), Terre des Hommes Netherlands has collaborated in the past with Terre des Hommes Lausanne.

b. Risk and context analysis The Collaborating Aid Organisations (SHO) participants have carried out a joint risk analysis. The so-called risk register appears regularly on the agenda and is updated. Below is a summary of the risks and the manageability of minimising these risks:

Managing the risks includes: analysis of the context, working with partners who have experience in complex contexts, good collaboration (including with other NGOs, government, UN clusters, local population), monitoring, quality systems and establishing a plan in case of a new disaster or state of emergency.

Strategic risks • The achievement of objectives within the context of Haiti, given the low capacity of national and local governments, poor infrastructure, high number of aid organisations and constantly changing circumstances • Coordination to avoid duplication and promote efficiency and effectiveness • Lack of local implementation partners (absorption capacity) • No clear topic-led approach to sustainability and reducing the risk of future natural disasters • Problems with the media, public, politics • ‘New’ disasters such as floods and hurricanes during the rainy season, epidemics such as cholera • Effectiveness and efficiency of the aid resources and money provided

Operational risks • Violence, political instability (presidential elections at the end of November), riots and violence, increased criminality • The price of local goods and services being driven up because of the impetus to spend • Lack of operational partners (for transport) and transport equipment • (Planning) problems, for example with respect to house building/permanent accommodation, import of goods and possession of land and raw materials • Lack of good staff and salaries being driven up. It is difficult to attract and retain good staff • Availability of the money

Managing the risks includes: cooperating with law enforcers, central procurement, staff training, monitoring and consultation regarding availability of the money.

Reporting risks • Timeliness and quality of qualitative and quantitative information and reports provided • Data/information collated from local and national government not sufficient

Management of the risks includes: feedback and timely planning, clear deadlines, quality controls, random samples, use of a registration and control system. Training plus advising staff, monitoring visits and evaluations. Risks with respect to compliance with legislation and regulations • Corruption • Inability to comply with SHO regulations because of the diversity of the participants and the dynamic context of international circles and implementing organisations in which SHO participants work.

Management of the risks includes: management by means of anti-corruption policy, local monitoring, internal audit position and internal control system. c. Application of equipment costs Equipment costs includes the following costs: identification, preparation, testing, formalisation, technical advice, monitoring

Terre des Hommes Annual report 2012 | 47

of projects in progress, management and control, reporting, functioning of the equipment to carry out the activities with respect to SHO expenditure, receiving resources (including financial and administrative equipment), external contacts and the costs of accountant audits and final evaluation. In short, costs incurred outside of Haiti (Lausanne and the Netherlands) and the accountants' fees incurred in Haiti fall under equipment costs (AKV). The maximum that may be spent on AKV is 6.72% of the programme costs. In total, this concerns the following amounts: • €2,597,386 for the programme budgets • €139,069 AKV costs in Lausanne and Haiti. This includes accountant's statements for both locations • €30,103 AKV Netherlands

d. The policy with respect to the local accountant's audit The Terre des Hommes policy is that all projects are audited by an accountant. For expenditure with respect to emergency aid and regeneration, the entire chain is audited (Haiti, Lausanne, Netherlands). This means that three accountant audits take place. The first for the outgoings in Haiti, the second for the AKV costs incurred in Lausanne which are passed on and the third

48 | Terre des Hommes Annual report 2012

for the AKV costs in the Netherlands which are passed on. All expenditure appears in the annual accounts which are audited by KPMG Accountants N.V. e. Timely receipt of financial reports It has been agreed with Terre des Hommes Lausanne that factual and financial reports will be submitted. All reports for 2012 have been received. f. Proper processing of reports received The content and financial aspects of the reports received are checked at the head office. Note whether the report is logical, if there are deviations from the planning/ budget and whether the report is detailed enough. If necessary, questions are asked or supplementary information requested. Generally speaking, the reports from Lausanne are detailed and correct. The reports are then put into the SHO format and submitted to the SHO. The SHO assessment is fed back to Terre des Hommes. g. Good administration Terre des Hommes Lausanne has three offices in Haiti (Port au Prince, Petit Goave and Les Cayes; Les Cayes existed prior to the earthquake). At these offices, seven staff members coordinate the programme (a programme manager, two districts

managers, two financial employees and two accounting employees). Terre des Hommes Netherlands receives a monthly report of local expenditure. Terre des Hommes Netherlands has worked frequently with Terre des Hommes Lausanne in emergency situations. The head of finance/ICT is in regular consultation with the head of projects and the head of finance at the sister organisation regarding administrative organisation and internal control. Terre des Hommes Netherlands focuses a lot of attention on managing the financial processes and holds the ISO and CBF quality certificates. Terre des Hommes also uses manuals and work descriptions and there is an annual accountant's audit. h. Implementation of the sanctions policy Once a project request is approved at the head office, the contract between Terre des Hommes and the project partner is signed. The contracts between Terre des Hommes Netherlands and Terre des Hommes Lausanne for the projects on Haiti have been signed. The sister organisation is the project partner for all Terre des Hommes Netherlands projects in Haiti. The Quality Manual (NEN-EN-ISO 9001:2008) sets out the measures to be taken in the case of failure to comply with the contract. If the local executing organisation fails to comply

with the contractual obligations, the head of projects must submit a request to the head of finance to suspend payments to the local partner. The head of projects then launches an investigation and decides whether the problems have been resolved and payments can be resumed. If the problems are ongoing, the head of projects submits a properly supported recommendation to the managing director to terminate the contract early. The head of projects ensures, if possible, that project funds still held by the local executing organisation are transferred to Terre des Hommes. None of the Haiti contracts were terminated early. In a number of cases, money was transferred later because local expenditure was also made later than planned. i. Existence and application of an anticorruption policy Terre des Hommes Netherlands has a detailed anti-corruption policy. This is described in the other guidelines manual and consists of: • Code of conduct against corruption, bribery and fraud • Explanation of the Code of conduct against corruption and fraud • Procedure in case of transgression of the Code of Conduct

• Enumeration of facts which can indicate fraud

spent in euro accounted for with the outcomes (see next page)

The anti-corruption policy describes in detail what the procedure is in the case of (potential) fraud or corruption concerning a Terre des Hommes project, office or employee or a supplier. j. The receipt of approved audit statements from the international umbrella organisations and/or local partners Terre des Hommes Netherlands and the Terre des Hommes Lausanne sister organisation are not part of an international circle. Terre des Hommes Lausanne is delivering the programme in Haiti itself and has three offices which are accountable for local expenditure for the programme. See also point d (the policy with respect to the local accountant's audit). k. Annual reporting and Directive 650 This report shows the income, outgoings and local expenditure. Footnotes indicate where amounts appear on the balance sheet and the statement of income and expenditure. The geographical areas in which Terre des Hommes works are: Leogane, Grand Goave, Petit Goave and Les Cayes. The following table splits out the activities and amount

Terre des Hommes Annual report 2012 | 49

Activity

Outcomes up to December 2012

Cost in euro

Temporary accommodation and household equipment

37,214 vulnerable people have received temporary accommodation and household equipment.

288,275

Water and sanitary facilities

24,822 people have access to clean drinking water. 17,134 people have benefited from sanitary facilities. A total of 41,956 people have benefited from water and sanitary facilities.

617,178

Child protection

4,430 vulnerable children protected, including 745 highly vulnerable children. 3,260 parents involved in providing psycho-social help to their children. In addition, 688 children have been registered in 44 orphans to avoid child trafficking.

487,142

Food and healthcare

45,682 children have had a medical consultation. 4,827 pregnant women have received prenatal care 50,509 people in total have received food and healthcare.

641,427

Programme costs

Salary costs for general coordination (7 FTEs) locally, the cost of the field offices and administration costs.

565,288

Total expenditure

2,599,310

2012

Cumulative 2010-2012

2,766,558

2. Interest

Total income

2,766,558

26,065

169,172

(26,065)

2,597,386

5. Total available scope of commitments

50 | Terre des Hommes Annual report 2012

separately in a savings account. Terre des

Detail of participant cash flows

Hommes does not receive any interest on

Transfer by P with respect to; • Support provided via the EO • Support provided via the IC • Support provided by the P personally

3. The amount of €26,065 is the remainder of the AKV proportion from Terre des Hommes Netherlands. AKV costs (€26,065) are together the costs

2,597,386

of Emergency Aid using SHO resources in the statement of income and expenditure.

2,597,386

5. The earmarked reserve was withdrawn on completion of the project (see the annual accounts for more information).

(26,065)

2012

Cumulative 2010-2012

508,455

2,736,455

257,999

2,599,310

has not deposited the income from giro 555

4. Participant commitments(2012: €0) plus the

Expenditure

• Support provided via the Executing Organisation (EO) • Support provided via the International Circle (IC) • Support provided by the P personally

2. Income from interest: Terre des Hommes

the current account.

Preparation and coordination costs (AKV)

4. Participant commitments (P)

1. This sum is included in the statement of accounts.

1. Income from joint campaigns

Total available for aid activities

Terre des Hommes signed an agreement with its sister organisation Terre des Hommes Lausanne for the Haiti campaign. Terre des Hommes acts as the executing organisation. Transfers (cash payments) to Terre des Hommes Lausanne are completed in accordance with the payment scheme set out in the agreement and based on approved reports. At the end of 2012, the amount still be paid by Terre des Hommes Netherlands to Terre des Hommes Lausanne was €137,145.

income and expenditure in the annual

Income

3. AKV

The Terre des Hommes aid is directed at around 93,000 people, 60,000 of them children. These 93,000 people have received various forms of assistance including protection, accommodation and access to clean drinking water or simply household equipment, for example.

Detail of local expenditure • Local expenditure by EO • Local expenditure by IC • Local expenditure by the P personally

4.6. Micro-loans India In 2007, Terre des Hommes Netherlands launched a micro-loans programme in India. Experiences with similar programmes in Bangladesh and Sri Lanka have shown that micro-loans can be a successful weapon in the fight against poverty. Many tens of thousands of people were given the opportunity to borrow money at favourable terms in order to start a business and make a contribution to their family income. Their children were also given the opportunity to attend school and respect for women as joint breadwinners increased considerably. However micro-loan programmes are complicated, risky and subject to fraud. A sound organisational structure, stringent controls, intensive support and independent supervision are absolutely crucial in determining the success or failure of such programme. In order to develop, support and lead the programme in the right direction, the decision was taken to set up a separate legal entity here in India. NELINDCO (Netherlands India Development Company) was born. Via this organisation, founded by Terre des Hommes Netherlands, local partners are selected, trained and otherwise supported to integrate savings and loan activities into the projects. Women are organised into groups (known

as â&#x20AC;&#x2DC;self-help groupsâ&#x20AC;&#x2122;) and are then trained and supported in setting up small businesses and other activities so that they can generate their own income in order to support themselves and their children. Now, after just five years, Terre des Hommes is able to look back on a successful undertaking. In total, around 600,000 euro has been granted in loans to 14 partner organisations which have used this fund to in turn provide small loans to the target group. There are now 2,355 women's groups with around 28,000 members, 95% of them women. The majority of the loans - around 85% - are used to improve income. The arrears in repayments is notably low at 2%. The income from interest for the partner organisation amounted to a total when converted of some 445,000 euro. Terre des Hommes has approved redeploying the principal sum and the interest on loans to grant new loans to the members of the women's groups. The number of women's groups is increasing, as is the total number of women able to benefit from the programme. Furthermore, income from interest on the microloans is helping to make the partner organisations more independent and they are becoming less dependent on Terre des Hommes for financial support. Terre des Hommes has now decided to formally cancel the outstanding loans and enable the partner organisations to further expand or

consolidate the micro-loans programmes independently. NELINDCO will remain active as a centre of expertise and supervisory body so that it can, where necessary, intervene and actively help partners to guarantee the continued success of this programme. Bangladesh The micro-loans programme in Bangladesh now relates only to Patuakhali. The phasing out of this programme was announced in the annual reports for 2009 and 2010. During this phase, participants' savings and outstanding loans will be settled together. As a result, the risk of irrecoverable loans is limited to the amount of outstanding loans not covered by savings. At the end of 2011 the amount of outstanding loans was 324,178 euro, of which 135,823 euro is covered by savings and 188,355 is therefore provided for. In 2012, the microloans programme in Patuakhali was transferred to UDDIPAN, one of the largest micro-loans organisations in Bangladesh. The programme was set up back in 1995 to give women in Patuakhali, the operational area of Terre des Hommes in the south of Bangladesh, the opportunity to save and to access loans to set up small businesses in order to maintain themselves and their children. The programme proved exceptionally successful with around 600 women's groups and almost 10,000 individuals taking part. The income from interest was considerable and sufficient not just to bear the costs but also to set

Terre des Hommes Annual report 2012 | 51

up new social projects in the area of education and healthcare. This means that the whole Patuakhali Development Project is virtually self-sufficient. However in 2007 new legislation and regulations came into effect in Bangladesh as a result of which Terre des Hommes as an international organisation was no longer permitted to execute micro-loans programmes. We tried for a further two years to obtain a permit but we were unfortunately not successful. Because Terre des Hommes was forced to withdraw, the percentage of people defaulting on payments increased and programme participants called in their savings. In addition, during this time the area was hit twice by severe cyclones (2007 and 2009), which also left people in financial difficulties and no longer able to repay loans. The percentage of irrecoverable loans increased rapidly to almost 50% and SAP with whom we were negotiating at the time to take over the programme then also hastily withdrew. However by the end of 2011 an agreement in principle had been reached with UDDIPAN which, in close collaboration with Terre des Hommes, thoroughly analysed the savings and all outstanding loans. Almost half of the outstanding loans are probably irrecoverable given that they have not been repaid for two years. Final transfer took place in April 2012. Despite the setbacks in recent years and the decision by the government in Bangladesh not to grant a permit, we can look back on a successful programme that has helped thousands of women

52 | Terre des Hommes Annual report 2012

in Patuakhali and that has generated sufficient financial resources to fund a significant part of the education and healthcare programme in this remote region.

5. Organisation

5.1 Structure and personnel In 2011, Terre des Hommes completed a reorganisation and repositioning of the organisation which resulted in greater impact in the area of marketing and fundraising. 2012 was the year for the HR policy to come to a standstill. The job losses at the head office as a result of the reorganisation at the time meant an increased workload for staff which was to further crystallise in 2012. The organisational efficiency drive continued with better use of management and ICT systems, process improvements, the reallocation of tasks and a clear choice being made between key and peripheral tasks. Terre des Hommes has a motivated workforce meaning that in 2012 a lot of work was once again done.

Terre des Hommes Annual report 2012 | 53

Personnel numbers in 2012

Number of FTEs at head office

2012

2011

2010

31.9 (*)

28.6

32.3

Female-male ratio Female Male

59% 41%

68% 32%

54% 46%

ratio of indefinite period to fixed term employment Fixed term Indefinite period

32% 68%

13% 87%

11% 89%

15% 35% 32% 18%

6% 39% 32% 23%

12% 41% 25% 22%

26%

20%

74%

80%

South Asia (Sri Lanka, India and Bangladesh). In Lei, Terre des Hommes has lost a very enthusiastic and experienced colleague who was hugely dedicated to Terre des Hommes. Lei Brouns was 66 years old.

Number of FTEs in regional office at the end of 2012 (including regional directors) 2012

2011

2010

South-East Asia

South Asia

East Africa

South America

Total

Breakdown by age Under 30 years of age 30 - 40 40 -50 Above 50 years of age

Number of FTEs in head office and regional offices

ratio of level of education Lower Vocational Education/ Intermediate Vocational Education Higher Vocational Education/ Higher Education

(*)= FTE This figure is based on the end of 2012. The number employees at that time was 34. The average number of FTEs in 2012 was 32.0.

Regional Director Lei Brouns passes away To our great sadness, our highly valued and beloved colleague Lei Brouns passed away on 14 November 2012 following a serious illness. Lei joined Terre des Hommes in 1984, spending the past 23 years as regional director for

54 | Terre des Hommes Annual report 2012

2012

2011

2010

Number of FTEs in head office and regional offices

2012

2011

2010

Total

95.9

98.6

118.3

Head office New starters In 2012, Terre des Hommes welcomed nine new employees to the head office. A good introduction is important in quickly providing employees with orientation within the organisation. This is primarily the responsibility of the manager.

Promotions Terre des Hommes encourages staff promotion. The flat organisational structure in which Terre des Hommes works means that it is not always possible to create opportunities for promotion. Where possible we look at to what extent taking on new or broader tasks will offer the employee prospects of development. Leavers Five employees left in 2012. An exit interview is held with any employee leaving the organisation. Generally speaking, the reason for leaving in the case of natural attrition is seeking a different challenge, or better working conditions elsewhere.

Percentage of leavers from the head office

30 25

26,8%*

20 15 10

14,7%

5 0

3,2% 2012

2011

2010

(*) Of which 14.6% redundancies as a result of the reorganisation.

Performance, remuneration and working conditions Terre des Hommes as a review process and a salary structure based on the Hay performance evaluation method. A meeting is held with each employee three times a year. These meetings looks at what work agreements are in place and progress made with respect to these agreements. Review meetings are held in December of each year. There are additional review criteria which apply to managers. In 2012, Terre des Hommes took part in a salary review carried out by the sector organisation VFI. 41 charitable institutions in the Netherlands took part. The benchmark indicated that a number of roles within Terre des Hommes are paid at a lower salary than the average in the sector. Where necessary, we will amend the system. Employee training & development Employees with the right knowledge and skills are hugely important for Terre des Hommes. Within the organisation, we accord great attention to training and development. A budget has been reserved for this of maximum 2.5% of gross salary costs. In 2012 we made staff development more professional by optimising skills management, rewriting job descriptions and introducing a formal training policy. In 2013 we will start to introduce PDP meetings (= personal development plan) for some of the staff both at the head office and in the regional offices. In 2012, training related both to increasing professional knowledge as well as improving skills. Total training and development costs in 2012 were

â&#x201A;Ź16,679 which represents 1.31% of the gross salary amount. This is below the estimated budget because we have come to a standstill with developments in anticipation of the HR tools implemented in 2012.

Training costs with respect to gross salary costs 1,5 1,2

1,31%

1,28%

2012

2011

1,2%

0,9 0,6 0,3 0,0

2010

Diversity Terre des Hommes attaches great value to diversity. We have opted not to set our diversity policy out in a written policy document, but rather to integrate diversity as an explicit element of our organisational structure. After all by working with a small head office in the Netherlands, deploying hardly any expats and focusing our organisation in the south through regional offices with local staff, there is already great diversity within the organisation. As a result, only 38% of

Terre des Hommes Annual report 2012 | 55

Terre des Hommes employees are Dutch. This means that 62% of the employees have a different nationality. This is distributed across at least 13 different cultural background and many different religious backgrounds. There is diversity not just in the regions, but at the head office too. Male-female ratio There is an equal ratio of men to women within the whole organisation with women having a slight majority (44% men and 56% women). This diversity is also reflected in the management positions within Terre des Hommes. Of the seven management positions (including the managing director, management team and regional directors) three were occupied by men and four by women in 2012. Sick leave at the head office Terre des Hommes had set itself a sick leave percentage of 3.4% as its target for 2012. This objective was not achieved because of the 4.3% absence percentage. In particular, the percentage long-term absence was high in 2012 due to the disability of one employee. In 2011, the percentage sick leave was 3.9%. There was thus an increase in sick leave compared with last year. Frequency of absence The frequency of absence at Terre des Hommes was 1.52 in 2011. The means that all employees of Terre des Hommes at the head office reported in sick on average 1.52 times per year. In 2012, the frequency of absence for Terre des Hommes was 0.94. There was therefore a decrease.

56 | Terre des Hommes Annual report 2012

Total sick leave figure*

4.3 0,52 3,61

0,15

Short (up to 7 days) Medium (7 to 42 days) Long (more than 6 weeks)

(*) = the sick leave figure excludes maternity and parental leave

12 employees visited the confidential adviser. At the time, this was partly to do with the unsettled period Terre des Hommes was operating in given the decline in revenue from the MSF-II subsidy and the reorganisation. Such issues are not formally the concern of an in-house confidential adviser since the confidential adviser can generally be consulted only in the context of the undesirable behaviour complaints system, the whistleblower system and in the case of other problems where the employee meets a barrier when it comes to discussing the issue directly with the manager and/or the board. Problems concerning individual employment contracts or reorganisation do not fall within this. However given employees' needs, the confidential adviser has not kept strictly to the rules in recent years and has tried to support people as far as possible.

Occupational health and safety Absence counselling within Terre des Hommes was in 2012 supported by Schermer Trommel & de Jong occupational health and safety. Four employees at the head office hold a first aid certificate.

Whistleblower system Terre des Hommes has a whisltleblower system. This system allows both employees and third parties to report any serious abuses with respect to Terre des Hommes. No reports were received in 2012.

Confidential adviser Terre des Hommes has both an external confidential adviser - which is the health and safety executive/ company doctor - and an internal confidential adviser. The internal confidential adviser reports to the board annually and anonymously the number of complaints from employees and reports whether these complaints have been resolved in the meantime. In 2012, four members of staff consulted the internal confidential adviser. In 2011,

Security policy In 2010, a start was made on developing a Safety & Security policy (security policy) for all staff when travelling (both at the head office and the regional office). In 2011 and 2012, head office staff who travel on business attended a three-day safety training course. Introduction of the security policy within the regional offices was completed in 2013.

Social activities In 2012, the annual company outing was an evening barbecue. A Christmas drink was also organised. Looking ahead Terre des Hommes aims to continually improve its personnel policy. 2012 was an important year in this respect since we started to implement the strategic HR plan. We continued with this implementation in 2013. Employee development is the spearhead of this. In addition, there is further organisational development through the implementation within the organisation of a new ICT system designed to improve management of the flow of information within Terre des Hommes. This will result in both the head office and the regional offices working differently. This is all with a view to further increasing the impact and efficiency of the organisation. So once again, it promises to be an interesting year!

Terre des Hommes Annual report 2012 | 57

5.2 Quality system General The process of project proposals put forward by local partners, and their approval, implementation and control is ISO-certified. This means that Terre des Hommes works in accordance with the standard which sets out requirements for an organisation's quality policy. On 29 April 2004 Lloyd’s Register Quality Assurance issued the ISO certificate (NEN-EN-ISO 9001: 2008) to Terre des Hommes. Following recertification, this certificate was extended to April 2013. The management and board of Terre des Hommes therefore looks critically at whether all the available quality tools are functioning as expected in order to assess whether the total quality management system is working. After all, this system provides us with better insight into how the organisation as a whole is functioning. The results and conclusions from, for example, the operational audit(s), the internal audits, the annual overview of complaints and the customer satisfaction survey(s) are included and processed as part of the annual management review. With respect to management review input, the following items are important under the ISO standard, in addition to assessment of the quality objectives of course: • Audit results • Customer feedback

58 | Terre des Hommes Annual report 2012

• Process performance and product conformity • Status of preventive and corrective measures • Follow-up measures from previous management reviews • Changes which may have an impact on the quality management system

The following are relevant with respect to management review output: • Improvements to the effectiveness of the quality management system and associated processes • Improvements to the ‘product’ with respect to customers' requirements • Resource requirements

Internal audits Head office In 2012, the planned internal audits were carried out by the internal audit team. At the beginning of 2012 a virtually completely new audit team was brought together as the result of sickness and attrition in 2011. The new audit team received internal audit training from an external expert. The results of the audits are summarised in audit reports. Based on the observations and failings, we have taken the necessary corrective measures. Mostly this involved (minor) adjustments to procedures or factual changes to working methods. There were no major changes on the basis of the audit reports in 2012. Everyone involved in the internal audits - the auditors and those being audited - confirmed that this tool works well in every aspect.

Regional offices In accordance with the Operational Audit Manual and procedure 5.3 of the Quality Manual, every regional office is visited once every two years for an operational audit. This means that the head office must carry out two Operational Audits each year. In 2012, Operational Audits were carried out in the regions of South America and South Asia. The 2012 operational audit was characterised by LEAN management (process improvements) and a general assessment of efficiency and whether the regions are ‘in control’. Staff in the regions have received LEAN training and will implement LEAN. The initial results have now been recorded. As part of the operational audit of South Asia, the status of the micro-loans programme in Sri Lanka and Bangladesh was reviewed. This is explained in greater detail in the annual accounts. In parallel with the operational audit of South Asia, KPMG provided input to this audit. In 2013, operational audits are planned for the East Africa and South-East Asia regions. Complaints Terre des Hommes operates a complaints procedure for third parties. Our definition of a complaint is: Any verbal or written expression of dissatisfaction from an institution, company or individual directed at Terre des Hommes, whereby the complainant complains about the policy or the conduct of Terre des Hommes.

Complaints in the Netherlands are coordinated and recorded centrally by the complaints coordinator. Complaints in the region are handled by the regional director in the region. This approach creates clarity. Terre des Hommes employees know what to do if complaints are received and are very familiar with the process. In 2012, Terre des Hommes recorded three complaints. In 2012, Terre des Hommes received the following complaints:

Number of complaints per year

Description of the complaint

Two complaints with respect to receiving a welcome letter.

Two people received a welcome letter although they had been donating to Terre des Hommes for years.

One complaint with respect to donating furniture

An individual wanted to donate furniture which he believed was very saleable via @Depot. Our colleague did not agree which led to a discussion.

In 2011 there were 37 complaints. In 2012, there was a very sharp (92%) decrease in complaints compared with 2011. However there were fewer campaign and street fundraising activities in 2012, which always generate the most complaints. A fall in the number of complaints is thus in line with expectations.

Number

50 40

43 37

1,2%

South-East Asia

South Asia

N/a

One project partner complained about receiving payment information (so-called yellow forms) too late One â&#x20AC;&#x2DC;whistleblowerâ&#x20AC;&#x2122; claimed that a Terre des Hommes project partner in Uganda was not spending Terre des Hommes funds effectively. The issue was investigated by the regional office and no irregularities were found. Two project partners (one in Kenya and one in Ethiopia) made a verbal complaint about how the regional director at the time did things (top down approach, lack of good partner relationship). The interim regional director subsequently made a personal visit to both project partners to improve the relationship.

A project partner in Bolivia complained about the decision by Terre des Hommes to stop financing the project due to a different strategic choice.

3 2010

2011

2012

Complaints in the region The complaints procedure was applied seven times in 2012. The table shows the number and type of complaint per region. Terre des Hommes recognises different severities of complaint. For example, a complaint about the conduct of a Terre des Hommes employee is generally deemed to be more serious than a well considered decision taken by Terre des Hommes which the partner does not agree with such as phasing out as the result of a shift in programme focus, provided this is communicated to the project partner in good time. This latter type of complaint is more common in periods during which we decide to phase out of a specific country or to change the programme focus. The peak in complaints during certain periods, such as in 2010, can in part be explained by the decision to announce to project partners that Terre des Hommes is stopping funding for the HIV/AIDS and Children with a Handicap programme.

Description of the complaint Two project partners (Philippines) submitted a complaint under the Child Protection Policy about showing an under-age victim of sexual exploitation in a video commissioned by the head office. Terre des Hommes subsequently removed the video from YouTube. The head office also sent a letter of apology to the project partners.

0 Number of complaints

Region

East Africa

South America

The number of complaints in the region decreased in 2012 compared with 2011. There were seven complaints in 2012 compared with 14 complaints in 2011.

Terre des Hommes Annual report 2012 | 59

Programme evaluations The recommendations from earlier evaluations in 2010 and 2011 were followed. As a result, since 2011 Terre des Hommes has focused more time and attention on influencing policy, developing partners' capacity and collaborating with other NGOs and local and national governments. We have also appointed a regional coordinator for the Child Trafficking programme in South-East Asia which has improved alignment and collaboration between the various organisations within the network. The evaluation policy has been sharpened. This revised evaluation policy applies to all the regions although East Africa is in an exceptional position with respect to MFS-II because all MFS-II projects form part of the joint MFS-II evaluation programming under the leadership of Partos. Terre des Hommes became a member of Partos in 2011. In 2012, Terre des Hommes had four programme evaluations carried out by an external consultant. In India, the Early Learning Programme was evaluated, in Cambodia and the Philippines the Stop Child Exploitation programme was evaluated and in Indonesia the Education Programme was evaluated. In order to exchange knowledge and experience between the regions, at the beginning of 2013 a handy summary of the most important findings and recommendations from the 2012 evaluations was put together. This will enable other regions to also make use of the evaluation results to improve the quality of their own programme.

60 | Terre des Hommes Annual report 2012

In 2013, we will evaluate the Vocational Training programme in Uganda and Tanzania, the SocialEconomic programme in Peru, the direct aid interventions for victims of sexual abuse in Bolivia and the programme for migrant children in the whole of South-East Asia. Developments with respect to ISO As part of recertification, Terre des Hommes migrated to the new ISO 9001: 2008 standard in April 2010. This involved a thorough examination of the total quality system which was then modified as necessary. With respect to the earlier board decision not to include the regional offices in the scope of the ISO certification, no changes were made in 2012. We expect that the process of strengthening the regional offices, introducing process improvements and the planned new ICT system will ensure that the quality standards within the organisation remain fully guaranteed. Given the cost implications, certification of the regional offices is not a priority.

5.3 Risk management and control Risk management focuses on aiming to reduce the chance of mistakes and wrong decisions as far as possible. This also involves an appropriate response to unforeseen circumstances. There is no guarantee of fully recognising and managing all the risks to which an organisation is exposed. There will always be risks which have not yet been recognised or which are not (yet) considered to be major. Achieving organisational objectives entails risks. For example in the case of Terre des Hommes, risks such as fraud by partner organisations, a shortfall in revenue or a change in political circumstances can affect whether objectives are achieved. No single system of risk management and internal control can provide absolute certainty that such risks will not present themselves or that they can be prevented. However we can reduce the chance of a risk and limit its consequences as far as possible. Risk management and internal control have always formed part of the Terre des Hommes business operations. However there was no system where we could accommodate and maintain related risk and measures. In 2012, Terre des Hommes obtained free access to an automated (online) system which achieved this.

The risks which Terre des Hommes may face were again documented and ranked based on the probability of a risk occurring and the impact that a risk has on the organisation. The impact is measured from a financial perspective, the damage to reputation it may entail and the effect on achieving organisational objectives. In the online system, the risks are categorised by region, category and cause.

Risk Area

Risk Category

Risk Cause

• Policy and strategy • Control & Supervision • Board and management • Funding • Use of resources • ICT • Sources of income • Countries • Partner organisations • Personnel/Organisations • Projects and programmes • Direction and (internal) management • Education/ Communication/ Marketing • Volunteers

• Product • Personnel/occupational health and safety • Environment • Equipment • Injury/safety • Legal/liability • Information/strategy • Image/politics • Financial • Operating process

1) Other 2) Business process 3) External 4) Organisation/ People 5) Politics 6) Process 7) Technical 8) Legislation and regulations

Terre des Hommes has identified 69 risks which are categorised as follows:

Risk category Extreme

Number 5

High

Medium

Low

Zero

The control measures which already form part of the business operations are linked to the risks above. Primary attention is focused on the risks in the categories ‘extreme’ and ‘high’. In 2013, we will again review whether the control measures referred to are still in line with what is actually happening on the ground. Generally speaking, the biggest risks facing a development organisation such as Terre des Hommes are: Financial risks The policy is based on spending the resources generated effectively. Fraud or the failure of projects present a financial risk. In order to manage this risk, the finances of the regional offices and the project partners are regularly assessed by Terre des Hommes itself

and by an independent accountant. In addition to review processes, we have expressly established a policy with respect to combating fraud and corruption. This policy includes a code of conduct and sanction provisions. In order to limit Terre des Hommes' debtor risk, funds received are spread across various banking institutions. Terre des Hommes does not invest in shares, bonds or other investment products. The aim of asset management is to minimise value impairments as a result of inflation. Terre des Hommes does not want to rely too heavily on government grants, and makes choices designed to tap into different income sources. This limits the risk of dependence. This policy is proving successful, certainly in a market in which the government is withdrawing. Of the total revenue, approximately 39% came from government grants. Quality of programmes Terre des Hommes strives to deliver high quality programmes and projects. There is always the chance that a project will not be successful. In order to reduce this risk, projects are assessed in terms of quality on the basis of internal monitoring and evaluation as well as evaluations by external experts. Project partners are thoroughly researched before contracts are signed with them. Exchanging knowledge with and via fellow and sector organisations is a source of information about the (potential) project partner.

Terre des Hommes Annual report 2012 | 61

Terre des Hommes is a member of the VFI (Dutch Association of Fundraising Institutions), Partos (a sector organisation for the development sector), PSO (an association for people collaborating in developing countries) and a participant within the SHO (Cooperating Aid Organisations) on emergency aid campaigns. With respect to the general issue of quality, Terre des Hommes was granted the CBF quality seal from the Central Bureau of Fundraising in January 1997 and has been ISO 9001:2008 certified since April 2004. Security risks Terre des Hommes operates primarily in countries where - as a rule - political stability reigns. The majority of the projects we finance are not set up in so-called fragile states. We work together with local project partners. They are familiar with the local circumstances and able to respond effectively to changes which may not be as clearly obvious to an outsider. Nevertheless, Terre des Hommes has developed a security policy and staff working outside the Netherlands receive preparation via training courses. Terre des Hommes is a member of the Dutch Security Network (DSN). Reputation risks Terre des Hommes applies a strict ‘Child Protection Policy’ directed at protecting children involved in projects financed or implemented by Terre des Hommes. This policy applies to all Terre des Hommes

62 | Terre des Hommes Annual report 2012

employees and the project partners we work with. Children are also protected in photo reports and other media campaigns. The victims of exploitation are not recognisable in images unless the victim has expressly provided consent to Terre des Hommes and is not at any risk.

5.4 Planning and control Planning & control cycle Multi-annual plan/ Budget

To ensure effective risk management and internal control, Terre des Hommes therefore uses a variety of integrated tools. • Our risk management system identifies, analyses and monitors the strategic and financial risks and the risks which may result in damage to reputation. • The line management, responsible for implementing risk management, is accountable to the management board in this respect, which is in turn accountable to the Supervisory Board. • Risk management forms a fixed element of our planning and control cycle. • We use codes of conduct, have a whistleblower system, have in place a security policy and have rules for fraud. • The Terre des Hommes quality system is assessed by external experts and via an internal monitoring and evaluation system.

Ultimately, how employees fulfil their responsibilities determines the quality and how it is controlled. In this context, the management board aims for an environment in which the focus is on integrity, exemplary conduct, budget discipline and an awareness of costs.

Annual Accounts/ Annual Report

Annual plan/ Budget

Interim Report

In the multi-annual plan, Terre des Hommes sets out the objectives and the strategy that must be adopted to achieve these objectives. In its multiannual plan 2011-2015, the focus is on developing a professional aid organisation which specialises in child exploitation and which strives for high quality and results. The multi-annual plan originally included a dose of healthy ambition which we were able to achieve only partially in 2012 due to continuing poor market conditions. We do not expect this situation to change in 2013 and have

maintained the budget at the 2012 level. Achieving this result will be a huge challenge. The annual plan translates the strategic objectives into concrete results per year. During the annual meeting with the Regional Representatives (autumn consultation), the budget for the year ahead, the results from the previous Management Review and the results from the past year are discussed. All this together provides input for the annual plan. The notes to the 2013 budget (section 6) explain the spearheads for the year ahead. There is a monthly report on the organisational objectives and the financial results. At the end of each calendar year, the management board is accountable to the supervisory board and other stakeholders. Annual accounts and an annual Joint Financing Programme report are prepared. In addition, reports may be submitted to other stakeholders. Furthermore, in the annual Management Review the board assesses the effectiveness of the quality system, including the results from audits, feedback from stakeholders, process performance, follow-up measures from previous board reviews and changes which may have an impact on the quality management system.

6. Budget 2013 Terre des Hommes Annual report 2012 | 63

Budget 2013

Cost group

Budget 2013

Financial year 2012

13,250,000 -

11,383,390 -

2,250,000 6,568,000 542,000 -

2,250,000 8,879,644 418,777 28,481

22,610,000

22,960,292

14,000,000 1,000,000 2,167,000 2,015,000 2,307,000 1,010,000 528,000

16,051,699 944,389 1,965,235 999,821 2,677,785 1,197,262 547,571

23,027,000

24,383,762

-417,000 -417,000

-1,423,470 -26,065 -123,575 -190,445 -1,083,385

Income Income from own fundraising Income from joint campaigns (specifically SHO) Income from third party campaigns (specifically lotteries) Income from grants Income from interest and investments Other income and expenditure Total income Expenditure Ongoing aid Emergency Aid/Rehabilitation Implementation costs own organisation aid Awareness-raising/Education Fundraising costs Cost of management and administration Other costs Total expenditure Deficit Earmarked funds Earmarked reserve Reserve of tangible fixed assets to achieve objective Reserve of financial fixed assets to achieve objective Reserve available to achieve the objective

Terre des Hommes in 2013 The world of development collaboration is undergoing rapid change. The Dutch policy is increasingly placing the emphasis on trade. There is much to be said for this. However trade alone will not resolve the issue Terre des Hommes is dedicated to â&#x20AC;&#x201C; stopping child exploitation. Our aim is to protect these children from exploitation, provide

64 | Terre des Hommes Annual report 2012

them with a safe haven and offer them a new future through education and vocational training. We deal with the perpetrators. The added value of Terre des Hommes as part of development collaboration is therefore undisputed. A further development which influences our work is happening in the developing countries themselves. A growing group of poor countries are developing into middle-income countries. Donors and target groups are in direct contact. Large NGOs are becoming even larger. At the same time development budgets and contributions from donors are under pressure. Furthermore, donors are demanding more measurable impact than previously, they are less loyal, but they want to be treated like customers. In 2013, we will respond actively to these trends and strengthen our proposition as a specialist and expert opponent of child exploitation. We are conducting further research into the extent of human trafficking and abuse. We also want to gain greater insight into the effects of the aid we provide and how we can further improve. We are also focusing our attention on the perpetrators' backgrounds. In the countries in which we operate, we are putting the emphasis on more fundraising and commitment from the local population. The regional offices must be able to generate 40% of their budget themselves within four years. In the Netherlands, Terre des Hommes is focusing on greater commitment and loyalty from Dutch organisations and donors across joint programmes in the Netherlands. In 2013, we will actively continue collaboration with Dutch partners.

7. Annual accounts 2012 Terre des Hommes Annual report 2012 | 65

66 | Terre des Hommes Annual report 2012

ANNUAL ACCOUNTS 2012 Balance sheet as at 31 December 2012

Statement of income and expenditure for 2012

31 December 2012

31 December 2011

1,421,802

1,190,820

501,718

625,292

3,530 6,070,586 17,353,574

193,975 4,167,547 22,270,427

25,351,210

28,448,061

Assets 01. Tangible fixed assets 02. Tangible fixed assets to achieve objective 03. Financial fixed assets to achieve objective 04. Receivables 05. Liquid assets

Financial Year 2012

Budget 2012

Financial Year 2011

11,383,390 2,250,000 8,879,644 418,777 28,481

13,600,000 2,250,000 7,968,000 800,000 24,000

10,011,730 309,053 2,250,000 5,055,636 599,265 9,043

22,960,292

24,642,000

18,234,727

16,051,699 944,389 1,965,235 999,821

16,988,000 500,000 1,660,830 1,829,636

13,580,699 1,022,240 1,613,310 1,204,962

19,961,144

20,978,466

17,421,211

2,185,550 492,235 141,886 71,707 300,689 33,289

2,887,753 492,051 141,833 116,552 301,577 33,276

1,960,717 452,236 130,356 64,221 272,472 30,845

3,225,356

3,973,042

2,910,847

1,197,262

1,236,747

1,160,417

1,197,262

1,236,747

1,160,417

Total expenditure

24,383,762

26,188,256

21,492,475

Surplus/deficit

-1,423,470

-1,546,256

-3,257,748

Income 09. Income from own fundraising 10. Income from joint campaigns 11. Income from third-party campaigns 12. Government grants 13. Income from interest and investments 14. Other income and expenditure Total income

Total assets

EXPENDITURE ON OBJECTIVES Liabilities 06. Reserves 07. Funds 08. Debts

8,846,089 56,723 16,448,398

10,243,494 82,788 18,121,779

25,351,210

28,448,061

15. Provision of ongoing aid 16. Emergency aid and rehabilitation 17. Implementation costs own organisation aid 18. Awareness-raising and education Total spending on objectives

Total liabilities

19. Fundraising income Cost of own direct fundraising Cost of own direct fundraising implementation costs Cost of joint campaigns Cost of third-party campaigns Cost of obtaining government grants Cost of investments Total fundraising income MANAGEMENT AND ADMINISTRATION Cost of management and administration Total cost of management and administration

Terre des Hommes Annual report 2012 | 67

Allocation of profits and/or losses

Summary of cash flow Financial year 2012

Financial year 2011

Financial year 2012

ALLOCATION OF PROFITS AND/OR LOSSES

CASH FLOW FROM OPERATIONAL ACTIVITIES

Surplus/deficit is added/deducted (-) to/from:

Cash flow from business operations

Earmarked funds Earmarked reserve own project in Bangladesh Reserve tangible fixed assets to achieve objective Reserve of financial fixed assets to achieve objective Reserve available to achieve the objective Surplus/deficit

-26,065

-367,587

-750,000

-123,575

-252,070

-190,445

-1,008,351

-1,083,385

-879,739

-1,423,470

-3,257,747

•P roceeds from donors and sponsors •P ayments to local project partners •P ayments to suppliers and employees • T ransfers to alliance partners MFS II •P roceeds from micro-loans Total cash flow from business operations

Financial year 2011

Total cash flow from investments and other

19,572,643

-11,615,615

-13,958,541

-8,939,508

-7,379,032

-2,823,927 54,622

-1,689,875 11,400

-5,102,954

-3,443,405

517,511 42,808

437,502 -

560,319

437,502

Head office The head office of Terre des Hommes is located on Zoutmanstraat in The Hague.

-370,580

-101,954

-370,580

-101,954

-4,913,215

-3,107,867

-3,638

-6,269

Regional offices In the regional offices in South-East Asia, South Asia, East Africa and South America, Terre des Hommes has regional representatives to manage a local staff force. The regional offices are registered locally in accordance with the legislation in each country.

-4,916,853

-3,114,136

Cash flow from investment activities • Investments in tangible fixed assets Total cash flow from investment activities NET CASH FLOW Net cash flow

The cash flow summary is prepared using the direct method. The liquid assets decreased by €4,916,853 compared with 2011 (closing balance 2011: €22,270,427; 2012: €17,353,574)

68 | Terre des Hommes Annual report 2012

Money exchange rate and conversion differences INCREASE/DECREASE CASH

Structure of the reporting unit Terre des Hommes Netherlands The aim of Terre des Hommes Netherlands Foundation is to provide concrete and direct help to children in need, in their own environment, wherever they are in the world, without differentiating on the basis of race, beliefs or political allegiance. In order to carry out its activities, Terre des Hommes Netherlands Foundation (hereinafter referred to as Terre des Hommes) has access to various offices and legal entities. The annual figures from the entities below are included in the consolidated annual accounts. Mutual receivables and debts are eliminated.

18,221,474

Cash flow from investments and other • Interest received • Rent received

GENERAL EXPLANATION AND PRINCIPLES OF VALUATION AND DETERMINING PROFIT/LOSS

Nelandeco Nelandeco was founded in 2004 to launch micro-loan

programmes in Sri Lanka with the project partners involved having a repayment obligation. This legal entity falls fully within the responsibility of Terre des Hommes. Nelandeco is registered in Sri Lanka as a Limited Company under the 1982 Companies Act, No. 17. Nelindco Nelindco was founded in 2007 to launch microloan programmes in India with the project partners involved having a repayment obligation. This legal entity also falls fully within the responsibility of Terre des Hommes. Nelindco is registered in India as a Limited Company under the1956 Companies Act. Responsibility was transferred in 2012 as a consequence of phasing out the micro-loans programme. Nelindco became a local project partner with effect from 2013. Volunteer groups Supporting the fundraising and awareness-raising activities of the Terre des Hommes Netherlands Foundation in 2012 there were nationally 42 (2011: 38) volunteer groups working on behalf of and reporting to Terre des Hommes. Of these volunteer groups, 32 (2011: 29) take the legal form of a foundation, eight (2011: 7) take the legal form of an association and two (2011: 2) volunteer groups operate as a support point; these volunteer groups do not have a legal form. Agreements (protocols) have been signed with all the volunteer groups to ensure that income raised on behalf of Terre des Hommes is in fact spent on the Terre des Hommes objective.

Principles of valuing the assets and liabilities Principles of valuation The principles formulated relate to the annual accounts as a whole. The principles of valuation have not changed compared with last year unless stated otherwise. The annual accounts have been prepared in accordance with the Reporting Directive for Fundraising Institutions. Foreign currency Receivables, debts and obligations in foreign currency are converted at the exchange rate applicable on the balance sheet date. The region's costs and income in foreign currency are converted in the consolidated accounts using an average annual exchange rate. The exchange rate differences arising from the conversion are included in the statement of income and expenditure. Head office transactions in foreign currency during the reporting period are included in the annual accounts at the settlement rate. The regional offices' annual accounts are in foreign currency and are converted for inclusion in the annual accounts at the exchange rate applicable on the balance sheet date. The exchange rate differences across the opening and closing capital and across changes in capital during the course of the financial year are included in the statement of income and expenditure.

Tangible fixed assets Real estate and renovations/modifications to interiors Real estate is valued at the cost of acquisition. With effect from the financial year 1997 real estate has been depreciated based on the purchase price and an economic life-cycle of 40 years with no residual value. No catch-up depreciation is applied. The costs of structural or interior modifications are activated and depreciated over five years. Office furniture and equipment Tangible fixed assets are valued at the cost of acquisition minus linear depreciation based on the economic life-cycle. The residual value of the fixed assets is set to zero. The following depreciation periods apply: • computer equipment and such like: 3 years; • vehicles: 4 years; • office fittings and fixtures: 5 years.

Tangible fixed assets to achieve objective Tangible fixed assets used in the context of the objective are depreciated as follows; • hospital ships: 10 years.

Terre des Hommes Annual report 2012 | 69

Financial instruments Financial instruments comprise trade and other receivables, cash, loans and other financial obligations, trade debts and other items for payment. Financial instruments are initially processed at fair value. Following initial inclusion, financial instruments are valued at the amortised cost price using the effective interest method. Financial fixed assets Financial fixed assets (loans) are valued at the amortised cost price minus exceptional impairment losses. If there are no premiums or discounts, the amortised cost price is the same as the nominal value. Assets in foreign currency are converted at the exchange rate applicable on the balance sheet date. Current assets Stocks Trade stocks held on the balance sheet date (by volunteer groups for example) and other stocks such as welcome donations are not included on the balance sheet, they are instead charged against the profit in the year of acquisition. Receivables Receivables are valued at the amortised cost price. Liabilities Earmarked reserve of tangible/financial fixed assets to achieve the objective Equity recorded under assets which is used directly and in full to achieve the objective is included in the earmarked reserve of tangible fixed assets to

70 | Terre des Hommes Annual report 2012

achieve the objective and in the earmarked reserve of financial fixed assets. Earmarked funds Money received from third parties for a specific purpose are accounted for under funds. Debts Debts are valued at the amortised cost price. Principles of determining profit/loss Income and expenditure are in principle allocated to the period to which they relate. Income Fixed contributions, donations from campaigns, corporate donations, donations from volunteer groups and other income from volunteer groups This income is accounted for in the year in which it was received.

Sale of goods (Terre des Hommes shops) Income from the sale of goods is accounted for in the year in which the actual sale was completed. Cooperating Aid Organisations Income from Cooperating Aid Organisations is accounted for in the year in which it is received. Lotteries Receipts and recoverable net income from the lotteries are accounted for as revenue in the relevant fiscal year. Amounts still due as at the balance sheet date are included as receivables on the balance sheet. Grants Income from grants is allocated in proportion to the progress of the activities to which the grant is credited.

Corporate donations for specific projects Based on the matching principle, corporate donations for specific projects are accounted for in the year in which the expenditure on the project in question is accounted for.

Result from investments Both realised and unrealised exchange rate result are included in the statement of income and expenditure in the relevant financial year. The costs associated with the investments are accounted for in the statement of income and expenditure under cost of investments.

Legacies Income from legacies are accounted for in the financial year in which the size of the legacy can reliably be established. Temporary outgoings in the form of advance payments are, unless already accounted for as income, accounted for as income from legacies in the year in which they are received.

Expenditure Costs of own fundraising The costs of own fundraising include all costs incurred in generating total income from own fundraising, i.e. the direct acquisition costs and the own organisation implementation costs associated with the fundraising.

Own organisation implementation costs The own organisation implementation costs are subdivided into costs associated with generating income and costs associated with expenditure in the context of the objective. The total implementation costs are, in accordance with Directive 650, allocated into the following groups using a key established when budgeting which is based on the number of training places and the estimated time requirements; • • • • • • • •

Aid provision costs Awareness-raising/education Fundraising costs Cost of joint campaigns Cost of third-party campaigns Cost of obtaining government grants Cost of investments Cost of management and administration

Implementation costs which are to be allocated in full to one of the groups above are passed on in full to the relevant group. Expenditure on the objective Provision of ongoing aid Obligations (commitments) to projects are deemed to have been undertaken when a decision to do so is taken by the management board or the Supervisory Board and are allocated in full to the year in which the decision is taken. This decision is communicated to the beneficiary. As a rule of thumb, Terre des Hommes enters into two or three-year obligations with existing project partners. The organisation enters into one-year obligations with new project partners.

Emergency aid and rehabilitation The item ‘Emergency Aid and Rehabilitation’ accounts for aid provision commitments arising as the direct result of a disaster situation and where the aid does not exceed a period of three years. The provision of aid facilitated by one or more campaigns by the Cooperating Aid Organisations is also accounted for under ‘Emergency Aid and Rehabilitation’. All other aid provision is accounted for under ‘Provision of Ongoing Aid.

against the best estimate of the cash value of the sums needed to fulfil the obligations on the balance sheet date.

Salaries/pensions The basic principle is that the pensions cost to be processed in the reporting period is the same of the amount of pension premiums owing over the period. Where the premiums owing have not been paid in full on the balance sheet date, an obligation is included for this amount. If on the balance sheet date, premiums already paid exceed the premiums owing, a deferred assets item is included where it is the case that the fund will make a repayment or that the amount will be offset against future premiums owing. Furthermore, on the balance sheet date a provision is included for existing additional obligations with respect to the fund and the employees if it is likely that fulfilment of the obligations will require an outflow of resources and the scope of the obligations can reliably be estimated. The existence or otherwise of additional obligations is assessed on the basis of the implementation agreement with the fund, the pension agreement with the employees and other (explicit or implicit) commitments to employees. The provision is rated

Terre des Hommes Annual report 2012 | 71

EXPLANATION TO THE BALANCE SHEET AS AT 31 DECEMBER 2012

02. Tangible fixed assets to achieve objective Amazon ambulance boat

Amazon hospital boat

Total

Balance as at 1 January 2012 Acquisitions

68,461 -

1,167,290 -

1,235,751 -

Balance as at 31 December 2012

68,461

1,167,290

1,235,751

Balance as at 1 January 2012 Depreciation

-43,390 -6,846

-567,069 -116,728

-610,459 -123,574

Balance as at 31 December 2012

-50,236

-683,797

-734,033

18,225

483,493

501,718

TANGIBLE FIXED ASSETS TO ACHIEVE OBJECTIVE Purchase price

01. Tangible fixed assets Real estate/ renovations and interior modifications at the head office and volunteer groups

Office furniture and equipment at head office and volunteer groups

Depreciation Regional offices' assets

Total

TANGIBLE FIXED ASSETS Purchase price Balance as at 1 January 2012 Acquisitions Disinvestments Balance as at 31 December 2012

1,481,865 231,849 -

1,603,644 118,309 -

365,763 140,613 -150,254

3,451,272 490,771 -150,254

1,713,714

1,721,953

356,122

3,791,789

-720,335 -52,525 -

-1,234,520 -184,892 -

-305,596 -22,373 150,254

-2,260,451 -259,790 150,254

-772,860

-1,419,412

-177,715

-2,369,987

940,854

302,541

178,407

1,421,802

Depreciation Balance as at 1 January 2012 Depreciation Disinvestments Balance as at 31 December 2012 Book value as at 31 December 2012

72 | Terre des Hommes Annual report 2012

Book value as at 31 December 2012

Earmarked reserve of tangible fixed assets to achieve the objective The balance under the item tangible fixed assets to achieve the objective (â&#x201A;Ź501,718) is the same as the reserve of tangible fixed assets to achieve the objective.

03. Financial fixed assets to achieve the objective South-East Asia

04. Receivables

India

Bangladesh

Total

FINANCIAL FIXED ASSETS TO ACHIEVE THE OBJECTIVE Principal loan sum 1 January 2012 Loan provision 1 January 2012

58,152 -

579,121 -579,121

324,178 -188,355

961,451 -767,476

Status as at 1 January 2012

58,152

135,823

193,975

New loan Loan repayment Reclassification of ongoing aid provision Change in provision for irrecoverable loan Revaluation due to currency effects

-54,622 -

-579,121 579,121 -

-324,178 188,355 -

Principal loan sum 1 January 2012 Loan provision 31 December 2012

3,530 -

-54,622 -903,299 767,476 -

Status as at 31 December 2012

3,530

This item consists wholly of micro-loans granted. These activities are being phased out. Micro-loans in India are converted into a donation and are therefore written off. Micro-loans in Bangladesh have been transferred. A detailed explanation can be found in section 4.6 of the annual report.

31/12/2012

31/12/2011

112,231 104,678 608,928 9,717 2,250,000 2,544,129 51,986 80,680 161,503 146,734

275,829 297,295 -297,295 69,584 757,998 21,419 2,250,000 39,212 255,385 215,284 115,932 166,904

6,070,586

4,167,547

RECEIVABLES Interest on liquid assets Interest on micro-loans via Nelindco Provision for interest on micro-loans via Nelindco* Projects, regional office and broadcasts abroad Legacies Volunteer groups/costs pre-paid by shops National Postcode Lottery Ministry for Foreign Affairs MFS II** OAK Foundation Terre des Hommes Lausanne EU grant Sri Lanka Other donations and grants to be received Withholding tax and pensions Other amounts pre-paid and recoverable Total receivables

**In December 2012, an amount of â&#x201A;Ź2.0 million was repaid to the Ministry for Foreign Affairs because MFS-II advances were too high (on the basis of cash accounting).

Terre des Hommes Annual report 2012 | 73

05. Liquid assets

06. Reserves 31-12-2012

31-12-2011

LIQUID ASSETS Cash and bank balances Head Office Savings accounts (daily withdrawals permitted) Deposits The Saint Exupéry Fund (of which €57,723 is not freely available) Cash and bank balances Volunteer groups Cash and bank balances Regions Total liquid assets

558,301

1,296,706

6,413,869 9,119,745

4,524,693 15,000,000

84,193

82,766

642,320 535,145

573,615 792,648

17,353,574

22,270,428

Terre des Hommes is easily able to fulfil its shortterm obligations of €14.4 million as at the balance sheet date (2011: €13.4 million). At the end of 2012, Terre des Hommes had an obligation of €15.7 million to local project partners.

Immediately available to achieve the objective

Continuity reserve objective

Reserve of tangible fixed assets to achieve the objective

Reserve of financial fixed assets

Total

5,424,227 -

4,000,000 -

625,292 -

193,975 -

10,243,494 -

-1,083,385

-123,575

-190,445

-1,397,405

-1,083,385

-123,575

-190,445

-1,397,405

4,340,842

4,000,000

501,717

3,530

8,846,089

RESERVES FOR LIABILITIES Status as at 1 January 2012 Changes Addition via allocation of profits and/or losses Deduction via allocation of profits and/or losses Total changes Status as at 31 December 2012

The amount of the continuity reserve complies with the VFI guidelines on financial management for charitable institutions and must not exceed 1.5 times the annual costs of the operating organisation. The reserve of tangible fixed assets to achieve the objectives comprises; • an ambulance boat in Brazil with a residual book value of €18,225 • an hospital boat in Brazil with a residual book value of €483,492

The reserve of financial fixed assets relates to an outstanding micro-loan.

74 | Terre des Hommes Annual report 2012

07. Funds

08. Debts The Saint Exupéry Fund

SHO Haiti

Total

Status as at 31 December 2012

31-12-2011

4,731,165 2,075,892

3,044,982 1,706,053

6,807,057

4,751,035

9,004,095

11,105,265

1,721,307

135,823

71,043 566,203

55,553 352,796

9,641,341

13,370,744

16,448,398

18,121,779

Debts Long-term debts

EARMARKED FUNDS Status as at 1 January 2012 Plus: Income Minus: Expenditure

31-12-2012

Long-term debts 2 years Long-term debts 3 years 56,723 -

26,065 -

82,788 -

-26,065

56,723

The Saint Exupéry Fund An amount of €56,723 will not be freely available until 31 December 2034 because of a historical notarial deed of donation which determines that amounts gifted must remain as an original asset base for a period of 30 years and that Terre des Hommes is permitted to make immediate use only of the fruits of this sum. Earmarked fund for Haiti During the period 2010 - 2012, Terre des Hommes received a total of €2,766,558 through the national campaign for Haiti via the SHO (Cooperating Aid Organisations). At the end of 2011, the earmarked fund for Haiti amounted to €26,065, this being the remaining AKV Terre des Hommes Netherlands which had not been spent. The project came to an end in mid-2012 and the balance was allocated. See section 4.5 of the Annual Report for more details concerning Haiti.

Total long-term debts Short-term debts Short-term project debts 1 year MFS-II subsidy received in advance* Savings from micro-loan participants in Bangladesh Other short-term debts Regional offices Other short-term debts Total short-term debts Total debts

Rights and obligations not included on the balance sheet Rights Via a notarial deed of donation 1,083 (2011: 1,100) Terre des Hommes benefactors have pledged contributions over the coming years. The annuity dates arising from this deed of donation were not taken into account in the balance sheet at the end of 2012. These amounts will be accounted for as income in the year in which they are received.

The expected income from legacies, the extent of which could not reliably be estimated as at 31 December 2012, was not taken into account. It is possible that as at 31 December 2012, this could represent an amount of approx. €1.5 million (2011: €0.8 million) in income received; these legacies will largely be settled in 2013. Obligations Terre des Hommes stands as guarantor, via a bank guarantee, for the lease for three months on 17 shops (2011: 17 shops), amounting to a total of €65,848 (2011: €65,848). In addition, group guarantees have been given on four shops to a total amount of €15.700. Terre des Hommes leases two photocopiers/printers from NIC Rental Services. There is a lease agreement in place for this equipment which ends on 1 October 2016. A company car has also been leased since 2012. This agreement was signed for a period of 42 months. The original period of 48 months was reduced by six months because more kilometres were being driven than planned. SUMMARY OF OBLIGATIONS

< 1 year

> 1 year

Total

Lease of shops Company car Photocopiers

451,673 5,794 31,048

912,782 8,692 85,381

1,364,455 14,486 116,429

488,515

1,006,855

1,495,370

Total obligations

Terre des Hommes Annual report 2012 | 75

EXPLANATION TO THE STATEMENT OF INCOME AND EXPENDITURE IN 2012 Consolidated statement of income 2012 Statement of income

09. Income from own fundraising 2012

Budget 2012

2011

5,179,629 699,926 2,636,062 193,296

5,925,000 1,125,000 2,300,000 350,000

5,128,927 743,800 1,595,324 129,273

8,708,913

9,700,000

7,597,324

676,624

1,250,000

520,127

676,624

1,250,000

520,127

1,831,298 104,701 42,545

1,880,000 150,000 120,000

1,686,560 76,939 109,221

1,978,544

2,150,000

1,872,720

19,309

500,000

13,097

8,462

11,383,390

13,600,000

10,011,730

2012

Budget 2012

2011

Haiti 2010

309,053

Total income from joint campaigns

309,053

INCOME FROM OWN FUNDRAISING

Head office

Regional offices/ National offices

Volunteers

Micro-loans

Total

Income from own fundraising

9,385,538

19,309

1,978,544

11,383,390

Income from joint campaigns

Income from third-party campaigns

2,250,000

Total individuals market

Government grants

8,879,644

Business market

410,457

699

5,644

1,977

418,777

28,481

20,954,120

20,008

1,984,188

1,977

22,960,292

Income from investments Other income and expenditure Total income

Individuals market Fixed amounts Donations from campaigns Legacies Spontaneous donations/other

Total business market Volunteers Sales revenue Donations received Other income Total volunteers Regional offices Young people Total income from own fundraising

10. Income from joint campaigns

INCOME FROM JOINT CAMPAIGNS Cooperating Aid Organisations

76 | Terre des Hommes Annual report 2012

11. Income from third-party campaigns 2012

14. Other income and expenditure

Budget 2012

2011

2012

Budget 2012

2011

INCOME FROM THIRD-PARTY CAMPAIGNS

OTHER INCOME AND EXPENDITURE

Cooperating Aid Organisations

Rental income

37,741

24,000

13,198

Exchange rate result

-46,092

6,087

Other income and expenditure

36,832

-10,242

TOTAL INCOME AND EXPENDITURE

28,481

24,000

9,043

National Postcode Lottery

2,250,000

Total income from third-party campaigns

2,250,000

12. Government grants 2012

Budget 2012

2011

GOVERNMENT GRANTS Ministry for Foreign Affairs Joint Financing Scheme

8,879,644

6,568,000

5,039,391

1,400,000

16,245

8,879,644

7,968,000

5,055,636

Other grants Total government grants

In 2012, part of the head office was sub-let to a company called Virenze which provides psychosocial care.

13. Income from interest and investments 2012

Budget 2012

2011

410,457 5,644 699

800,000 -

407,071 5,157 1,665

416,800

413,893

1,607

1,977

183,765

418,777

800,000

599,265

INCOME FROM INTEREST AND INVESTMENTS Interest Income from interest of current account/ savings accounts/deposits Interest received from volunteer groups Interest received from regional offices Total income from third-party actions Investments Withholding tax refund

Interest on micro-loans TOTAL RESULT FROM INVESTMENTS

Terre des Hommes Annual report 2012 | 77

Consolidated statement of expenditure 2012

15. Provision of ongoing aid

Statement of expenditure

Head office

Regional offices/ National offices

Volunteers

Micro-loans

Total

Ongoing aid

15,882,386

169,313

16,051,699

Emergency aid and rehabilitation

944,389

Implementation costs of providing aid

248,085

1,717,150

1,965,235

Awareness-raising/education

947,849

51,972

999,821

Cost of own fundraising

1,847,498

830,287

2,677,785

Cost of joint campaigns

141,886

71,707

300,689

33,289

1,197,262

21,615,040

1,717,150

882,259

169,313

24,383,762

Cost of third-party campaigns Cost of grants received Cost of investments Cost of management and administration Total expenditure

16. Emergency aid and rehabilitation 2012

Budget 2012

2011

3,536,967

3,500,0000

3,518,142

South Asia

853,503

2,600,000

3,272,208

East Africa

6,785,815

5,214,000

3,256,950

East Africa (transfers to alliance partners MFS-II)

2,823,927

2,381,000

1,689,875

South America

2,051,487

2,093,000

1,843,525

1,200,000

16,051,699

16,988,000

13,580,699

PROVISION OF ONGOING AID South-East Asia

Other Total provision of ongoing aid

17. Implementation costs own organisation aid 2011

EMERGENCY AID AND REHABILITATION

2012

Budget 2012

939,769

500,000

709,860

Using SHO resources

4,620

312,380

944,389

500,000

1,022,240

78 | Terre des Hommes Annual report 2012

In the Netherlands Locally Total implementation costs own organisation aid

18. Awareness-raising and information

2011

IMPLEMENTATION COSTS OWN ORGANISATION AID

Own emergency aid

Total emergency aid and rehabilitation

2012

Budget 2012

2011

AWARENESS-RAISING AND EDUCATION

248,085

254,839

249,032

1,717,150

1,405,992

1,364,278

1,965,235

1,660,830

1,613,310

Direct costs

556,974

1,386,953

798,099

Own organisation implementation costs

442,847

442,683

406,862

Total awarenessraising and education

999,821

1,829,636

1,204,962

19. Cost allocation

Objective Provision of aid

Costs

Awareness

Fundraising

Joint campaigns

Third-party campaigns

Acquisition grants

Investments

Management and administration

Total 2012

Annual plan 2012

Total 2011

Provision of aid Provision of ongoing aid

16,051,699

16,988,000

13,580,699

944,389

500,000

1,022,240

16,996,088

17,488,000

14,602,939

146,200

330,478

367,333

105,883

49,684

224,391

24,842

787,404

2,036,214

1,990,213

1,891,095

Accommodation costs

8,598

19,435

21,602

6,227

2,922

13,196

1,461

46,306

119,746

127,410

171,239

ICT costs

7,899

17,855

19,847

5,721

2,684

12,124

1,342

42,543

110,015

228,700

257,246

85,388

75,079

83,453

24,055

11,287

50,979

5,644

256,092

591,977

548,235

332,703

248,085

442,847

492,235

141,886

66,577

300,689

33,289

1,132,345

2,857,952

2,894,558

2,652,282

1,717,150

1,405,992

1,364,278

Total regional offices

1,717,150

1,405,992

1,364,278

Total Overhead (implementation costs)

1,965,235

442,847

492,235

141,886

66,577

300,689

33,289

1,132,345

4,575,103

4,300,550

4,155,729

General

505,002

1,355,263

5,130

64,918

1,930,313

3,553,206

1,963,084

Volunteers

51,972

830,287

882,259

846,500

770,723

Total marketing and communication

556,974

2,185,500

5,130

64,918

2,812,572

4,399,706

2,733,807

18,961,322

999,821

2,677,785

141,886

71,707

300,689

33,289

1,197,262

24,383,762

26,188,256

21,492,475

Emergency Aid/Rehabilitation Total aid provision Overhead Head office Personnel costs

Other indirect costs Total head office Regional offices

Marketing and communication

Total expenditure

Terre des Hommes Annual report 2012 | 79

South-East Asia 2012

South Asia

2011

2012

East Africa 2011

2012

South America 2011

2012

2011

2012

Budget

2011

Regional offices specification Provision of aid Personnel costs

248,918

312,122

237,417

191,492

334,771

257,488

212,145

207,536

1,033,251

998,254

968,638

Office costs

175,180

127,487

114,736

78,215

195,379

105,171

198,604

84,768

683,899

407,738

395,641

424,098

439,609

352,153

269,707

530,150

362,659

410,749

292,304

1,717,150

1,405,992

1,364,278

Number of FTEs per regional office incl. Regional Representative

Average personnel costs per FTE per annum incl. regional representative's salary

12,446

16,427

14,839

9,575

19,692

13,552

19,286

17,295

16,145

11,884

13,838

Total

80 | Terre des Hommes Annual report 2012

KEY PERSONNEL RATIOS

2012

2011

Part-time percentage

100%

Period in employment

1/1 – 31/12

1/1 – 28/2 and 1/3 – 31/12

Number of employees During the financial year 2012, the average number of employees at the head office was 31.9 FTEs (2011: 28.6). In the regions there was an average of 64 FTEs (2011: 72) working. The total average number of employees in 2012 was 95.9 FTEs (2011: 100.6).

Hours per week

Gross salary

99,696

99,122

Management board remuneration In accordance with the new directive 650, management board personnel costs are reported separately in this annual report. The Terre des Hommes management board comprises a oneperson executive board manager whose working week is 38 hours. The Board of Directors deems the manager's salary to be in line with the gravity of the role. No advance payments, loans or guarantees have been granted to the board.

Holiday pay

7,976

7,767

107,672

106,889

Social security payments (employer's contribution)

4,963

4,573

Pension payments (employer's contribution)

14,046

13,311

126,681

124,773

Name: A.J. van Santbrink Position: Managing Director Type of employment contract: Fixed period to 1 March 2016 (employed since 1 March 2011)

Annual income

Total annual income

Total remuneration

*In 2011, R. van Huizen left the organisation on 28-02-2011 because he had reached retirement age. A.J. van Santbrink followed him on 01-03-2011.

Terre des Hommes Annual report 2012 | 81

Net result from volunteer groups 2012

2011

Growth compared with 2011

Terre des Hommes shops Terre des Hommes Foundation Amsterdam e.o. Terre des Hommes foundation Apeldoorn Terre des Hommes Foundation Arnhem Terre des Hommes Foundation Assen Terre des Hommes Foundation Barneveld

37,156

3,270

1,036.3%

Terre des Hommes Foundation Emmen

2012

2011

Growth compared with 2011

2012

2011

Growth compared with 2011

17,471

16,592

5.3%

Terre des Hommes Foundation Nijmegen

29,954

11,560

159.1%

New in 2012

Terre des Hommes Foundation Oosterhout

42,043

42,209

-0.4%

155,734

157,086

-0.9%

Terre des Hommes Foundation Enschede

2,594

Terre des Hommes Foundation Goes

9,692

4,391

120.7%

Terre des Hommes Foundation Pijnacker

32,883

50,376

-34.7%

Terre des Hommes Foundation Rotterdam

New in 2012

Terre des Hommes Foundation Utrecht

23,956

4,562

425.1%

Terre des Hommes Foundation Venlo

57,737

77,135

-25.1%

Terre des Hommes Foundation Wageningen

50,522

45,760

10.4%

Terre des Hommes Foundation Zoetermeer

44,780

47,528

-5.8%

Terre des Hommes Foundation Zundert/ Rijsbergen

63,237

58,447

8.2%

Terre des Hommes Foundation Zwolle

43,384

39,392

10.1%

1,107,832

1,011,552

9.5%

88,500

89,313

6.2%

1,196,332

1,100,865

9.3%

Terre des Hommes Foundation Groningen

-955

New in 2012

Terre des Hommes Foundation Haarlem

-1,484

New in 2012

Terre des Hommes Foundation Heerenveen

17,764

14,820

19.9%

Terre des Hommes Foundation Helmond

33,361

34,925

-4.5%

Terre des Hommes Foundation Hengelo

93,124

77,005

20.9%

Terre des Hommes Foundation Hilversum

14,776

8,750

68.9%

9,789

35,130

454

7,137

2,056.1%

392.2%

Terre des Hommes Foundation Bergen op Zoom

29,467

Terre des Hommes Foundation Breda

33,337

74,289

-55.1%

Terre des Hommes Foundation Delft

40,951

34,764

17.8%

Terre des Hommes Foundation The Hague

39,131

Terre des Hommes Foundation Deventer

13,379

Terre des Hommes Foundation Drachten

-4,341

26,004

23,491

-813

-18,036

82 | Terre des Hommes Annual report 2012

13.3%

66.6%

1,745.7%

75.9%

3,903

Terre des Hommes Foundation Leeuwarden

40,535

Terre des Hommes Foundation Leiden

42,293

44,701

-5.4%

Terre des Hommes Foundation Maastricht

33,311

45,826

-27.3%

Terre des Hommes Foundation Middelburg

20,091

46,097

33,830

-12.1%

-40.6%

Total shops Terre des Hommes Promotional Teams (associations and support points) Total volunteer groups

New in 2012

3,127

2012

Gross turnover Acquisition costs * Net turnover Cost price of articles sold ** Gross profit Donations Income from miscellaneous activities Other income Total profit from volunteer groups

2011

Growth compared with 2011

1,831,298

1,728,237

6.0%

761,833

771,856

-1.3%

1,069,465

956,381

11.8%

26,024

41,677

-37.6%

1,043,441

914,704

14.1%

104,701

76,939

36.1%

42,545

23,555

80.6%

5,645

85,666

-93.4%

1,196,332

1,100,865

8.7%

depreciation costs are paid in full by the head office and are depreciated over five years. The depreciation costs are then allocated to the results from each shop. Any receivables and debts from the shops are set out in more detail in the explanation to the balance sheet as at 31 December 2012. The 'Obligations not included on the balance sheet' section shows the amount in bank guarantees issued by the head office as well as the obligations with respect to lease of the shops. Any outstanding advance payments are also deducted from the results reported by each shop. Five new shops were opened in 2012.

* Acquisition costs relate to direct costs on purchases and sales such as the lease of shop premises and energy costs. ** Most of the shops acquire articles to be sold without paying for them. These are second-hand items. A number of the shops buy items in. The results above may differ from the results from the shops themselves. These differences are because the head office accept responsibility for various costs itself, such as various insurance policies, set-up fees, coordination costs etc. The head office also finances setting up of the shop and the shop's inventory. The inventory

Terre des Hommes Annual report 2012 | 83

AUDIT STATEMENT FROM THE INDEPENDENT ACCOUNTANT

The original financial statements were drafted in Dutch. This document is an English translation of the original. In the case of any discrepancies between the English and the Dutch text, the latter will prevail.

84 | Terre des Hommes Annual report 2012

Supervisory Board

Board

Legal affairs quality, HRM, organisational policy

Board department

Board secretariat

Marketing and Communication department

Programmes department

Project administration South-East Asia

Finance department

Special relationship management

Communication public and media

Institutional Fundraising

Control

Accounting

Media/editorial marketing

South Asia

administration

Policy development

Legacies, Microsoft dynamics,

East Africa Monitoring and evaluation South America

Business market/ equity funds

Private market

Legacies/ Special gifts

Volunteers

EU funding Funding of

Media education programmes System management Research into children's rights

Donors' administration

Database management

Online marketing

Regional promotional/ TdH shops

Reception

Management of the regions

Terre des Hommes Annual report 2012 | 85

Number of partners to which amounts were allocated 2012

2011

2012

Number of partners to which amounts were transferred 2011

2012

2011

2012

2011

Ongoing South-East Asia Cambodia

1,472,341

1,000,478

926,477

967,306

Indonesia

1,182,566

582,257

983,481

1,028,958

Philippines

810,888

784,872

842,439

814,639

Laos

484,104

265,020

154,550

Thailand

71,172

666,341

368,041

683,034

3,536,967

3,518,142

3,385,458

3,648,487

617,648

531,946

546,234

849,080

249,310

2,298,070

1,660,134

1,977,847

-13,455

442,192

549,515

1,116,638

853,503

3,272,208

2,755,883

3,943,565

Kenya

2,459,456

1,596,724

2,203,348

1,214,006

Tanzania

1,889,354

841,468

1,479,159

821,345

Uganda

2,032,394

483,590

1,528,800

912,448

Ethiopia

404,611

47,395

275,567

2,823,927

1,977,648

Total South Asia Bangladesh India Sri Lanka Total East Africa

MFS-II* Total

2,823,927

9,609,742

4,946,825

8,310,801

2,947,799

Bolivia

635,944

449,895

672,016

596,243

Brazil

642,935

719,983

254,599

321,396

South America

86 | Terre des Hommes Annual report 2012

Number of partners to which amounts were allocated 2012

2011

2012

Number of partners to which amounts were transferred 2011

2012

2011

2012

2011

Peru

717,519

673,648

1,007,989

965,444

Nicaragua

55,059

2,051,487

1,843,525

1,934,604

1,883,083

Sri Lanka

Total

129

126

16,051,699

13,580,699

226

228

16,386,746

12,422,935

Total EU Projects

Total ongoing aid

Emergency Aid & Rehabilitation/Other Using own resources Bangladesh

50,000

25,000

Burkina Faso

154,580

77,290

Philippines

46,048

35,000

Indonesia

Lebanon

Kenya

500,771

500,000

Sri Lanka

31,995

Thailand

508,174

-2,000

316,294

Uganda

20,351

4,620

312,380

300,000

764,000

944,389

1,022,240

863,272

1,535,606

142

130

16,996,088

14,602,939

241

232

17,250,018

13,958,541

28,985

179,094

130,000

24,337

239,611

65,000

Using SHO resources Haiti Total emergency aid Total ongoing aid and emergency aid

* Relates to transfers to alliance partners plus monitoring and coordination costs

Terre des Hommes Annual report 2012 | 87