SUMMARY OF TREASURER'S REPORT
|Contributed by Bernard Gouget, IFCC-Treasurer|
Once again our warmest thanks to the previous treasurer, Ghassan Shannan (2006-2011), for his excellent services to the IFCC from 2006 to 2011.
In 2012, no revenue was expected from the IFCC congresses. The General Conference in Kuala Lumpur was the number one expense, excluding the fixed expenses.
Figure 1: General Conference grand total: CHF 293 135, 70
The estimated budget for 2012 showed a significant imbalance between total expenses (CHF1,739,409.00) and total income (CHF633,200.00), with a net loss of CHF1,106,209.00. Despite this, the actual cash flow amount in Credit Suisse, completed by the revenue generated by 2011 Worldlab / EuroMedlab, helped cover all expenditure. At the end of 2012, a loss of CHF 307.936 was lower than expected. Medium-term budget balance remains fragile; this first tax year was an opportunity for the in-depth analysis of the cash flow as well as scenarios for the optimization of the IFCC's finances.
Figure 2 shows the percentage of the total income of IFCC end of 2012 (CHF 838.654). We must thank the 88 full members for their regular payment of the annual fees, while we regret the suspension of 2 members due to non-payment of membership subscriptions for a period of three years.
Figure 2: Total income by categories (CHF 838.654) at the end of 2012
Figure 3 reflects full member dues by region for a total expected amount of CHF 192.000. The decision to create 4 fees categories, in accordance with the World bank's criteria based on gross national income per capita, has proven to be judicious and effective (figure 4) and should encourage emerging countries as well as new scientific societies to join the IFCC.
Figure 3: Full Members dues by regions, total expected 2012 dues: CHF 192.000 Legenda
Figure 4: Full Members dues by fees levels, total expected 2012 dues: CHF 192.000 Legenda
To help the regions with their activities, the IFCC provides subsidies of up to CHF 10,000, except for the EFLM who receives additional dividends from Euromedlab's revenue. These subsidies should be modified via new contractual relations such as the signing of a Memorandum of Understanding between the IFCC and the Presidents of the IFCC regions as part of a win-win strategy.
Affiliate members contribute up to CHF3,600; this participation should increase with the new membership arrangements.
Figure 5 provides an overview of the expenditure by functional unit (CHF 1.146.637), the breakdown of which is largely stable. Our warmest thanks go to the Chairs of Divisions, Committees and WGs who keep a vigilant eye on expenditure and were able to use their modern communication means to limit travel expenses and improve their work efficiency via the Internet. The 2013 budget was built after interactive discussion with the Chairs of the IFCC divisions, it was asked to decide the annual budget for their C and WGs in a realistic approach to have a 2013 total balanced IFCC budget. Thanks again for their approval.
Figure 5: Overview of expenses by functional units budget (Total 1.146.637)
In the current context of economic crisis, Corporate members (50 in 2013) remain loyal and proactive.
While the number of members is increasing, company consolidation results in a slight drop in resources for the IFCC, from CHF 296,000 in 2011 to actual CHF 281,000 in 2012.
Figure 6: Corporate Members dues 2010-2012
To validate the signatures of the IFCC President and Treasurer, Graham Beastall and Bernard Gouget accompanied by Paola Bramati, went to Geneva in January 2012 to meet our Swiss bank contacts and attempt to optimize cash flow, which remains fragile in the medium term, as well as improve our financial investments.
IFCC continues to maintain three accounts in Euro, USD and Swiss Franc at Credit Suisse and an investment account at LGT Group - Private Banking and Asset Management. In light of the loss recorded in 2011 and the portfolio management fees paid to LGT Group, a decision was made to change the profile of the portfolio, i.e. switch from a "growth" to a "balanced" profile with a view to increasing the proportion of bonds and limiting the risk posed by the high percentage of equities (figure 7).
Fig. 7: The LGT asset balanced profile and currency allocation
This proved to be a successful strategy: at the end of 2011, the statement of assets was€1,984,652.43 to reach €2,113,513.47,at the end of 2012 i.e. a+ 6.49% performance with a €128,861.54 profit,minus management fees(figure 8).The LGT fees are "all-inclusive fees" which include "administration, advisory and transaction costs". After negotiation, LGT granted us special conditions: 1.2% on the managed portfolio and 0% on the advisory portfolio (conference & congress). This gives an average of0.94% for 2012, or €19,432.25.It is currently a good deal considering that he official fees for an actively managed "balanced" portfolio is 1.98%; and previously 2.28% for a "growth" model.
Fig. 8: LGT Portfolio Historic performance (2010-2012)
For the time being, LGT do not recommend a change in the investment profile, or investment of the liquidity part that is currently in the Money Market Funds. One reason is that the interest rates will remain very low in 2013; interest rates will not increase before 2014 or even 2015! This is positive for "niche" sectors, like inflation bonds, high yield bonds or emerging market bonds.
Regular contacts with the banks have, up until now, been fruitful and relationships based on trust and transparency have helped improve the assessment of our federation's financial risks.
As usual, the 2012 financial statements were certified by Mr John Gates, Partner with Humphreys and Gates Audital who provided valuable guidance and expertise.