HIVOS ANNUAL ACCOUNT 2016

ANNUAL ACCOUNT

2016

TABLEOF

CONTENT

1. Financial management report

2. Balance sheet as at 31 December 2015

3. Statement of income and expense for the year ended 31 December 2015

4. Cash flow statement for the year ended 31 December 2015

5. Accounting principles

6. Notes on the balance sheet as at 31 December 2015

7. Notes to the statement of income and expense for 2015

8. Notes to the allocation of expense for 2015

9. Notes to the results for 2015

10. Remuneration of the Executive Board (VFI)

11. Remuneration of the Executive Board (WNT)

12. Overview of funding for programmes and projects for 2016

13. Overview of WE4L expenditures 2016

14. Foundation only balance sheet as at 31 december 2016

15. Events after balance sheet date

16. Foundation only Balance sheet 2016

17. Foundation only Statement of income and expense 2016

18. Notes to the foundation only balance sheet as at 31 december 2016

19. Notes to the Foundation only allocation of expense 2016

Independent auditor’s report

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Our 2016 financial results show an increase in total income from 67,8 million euro in 2015 to 127,9 million euro in 2016. This sharp increase has been caused partly by a higher than expected income from our regular operations (totalling 96,0 million) but mostly by an extraordinary income realised from our new agreement with Hivos-Triodos Fund (HTF) and Triodos Bank that enables Hivos to retrieve part of the funding it provided HTF throughout 1995-2015, totalling 31,9 million euros. The extraordinary income appears in the accounts as revaluation of loans and participations. These previously were not intended to be paid back and therefore were written off in the financial records of Hivos. According to the agreement this capital will be paid back in the years to come.

For regular operations Hivos received a total income of 96,0 million (compared to a budget of 77,2 million) mainly from our traditional sources, government subsidies and multilateral institutions (which realised 79,0 million euro, compared to budget of 71,0 million euro and prior year income of 47,4 million euro) and from other sources, mainly foundations, an amount of 11,0 million euro which also was more than anticipated in the 2016 budget. Together with ‘other incomes’ (6 million euro including revaluation BVs -1 million) Hivos realised a modest positive result from operations (income 96,0 million -/- expenditures 96,6 million +/+ 1,2 million from appropriated funds/reserves).

The positive result is in line with our goal of attaining full cost recovery. The full cost price model and new planning and control cycle which were both introduced in 2015 and fully implemented in 2016 have demonstrated that they will support Hivos towards achieving this goal.

Also in 2016 Hivos continued diversifying its funding sources. The key donors for our programmes in 2016 included the Global Fund for 29,7 million euro (supporting our programmes in in Guatemala, Bolivia and South-East Asia and Southern Africa), the Dutch Ministry of Foreign Affairs for 26,0 million euro (mainly for the Strategic Partnerships and part for MFS) and DFID with 10,8 million euro (mainly for Energia and MAVC). We also received indirect grants from Swedish, US and German governments, and a

contribution from Palladium (Indonesia), which acts on behalf of the Australian government.

Our spending totalled 96,6 million in 2016 (up from 64,6 million in 2015) of which 91,9 million euro was spent on objectives which constitutes 95,2% of our total spending (93,5% in 2015). The thematic distribution was sexual rights and diversity 31, 6 million euro; transparency and accountability 19,9 million euro; women`s empowerment 14,8 million euro; renewable energy 15,9 million euro and sustainable food 6,5 million euro.

FINANCIAL IMPACT OF THE HTF AGREEMENTThe event in 2016 with the highest financial impact on the Hivos result was the new agreement 2016-2020 between Hivos, HTF and Triodos Bank. Under this agreement, from 2016 to 2020 Hivos will receive in total 32 million euro from HTF, as a repayment on subordinated loans issued during 1995-2016. Hivos will use the 32 million euro to invest in innovation and new programme development.

The revision of the agreement between Hivos, HTF and Triodos Bank was motivated by Hivos’ change of strategy in which it excluded microfinance as policy theme. Hivos wishes HTF to be aligned with its Green Society agenda and hence agreed with HTF and Triodos bank that the HTF fund will for 70% be realigned to investment in Small and Medium Scale Enterprises in the domain of sustainable energy and sustainable food. The new agreement 2016-2020 is designed to ensure that HTF can grow to a portfolio of about 100 million euro, with more diversified funding.

Between 1995 and 2015, Hivos provided HTF subordinated loans and guarantees which enabled HTF to build up a sizeable portfolio of participations in microfinance institutions and supported the financial sustainability of HTF (in line with the goals of the Green Entrepreneurship programme of Hivos). These were issued for an indefinite period and, since they were not intended to be paid back, were written off in the financial records of Hivos.

In 2016 the agreement leads to an increase of appropriated funds through the income statement of 22,4 million euro, equal to the guarantees Hivos issued to HTF that are no longer needed. This extra accrual will only take place in 2016 but covers 5 years (2016-2020) in which these amounts will be realised.

The amount of 22,4 million is appropriated to programme funds. Hivos has created two new programme funds to this end: “fund for programme development and projects” and “Hivos innovation fund”.

An additional 9,5 million is recognised from unrealised revaluation gains from HTF participations that were financed with Hivos loans in the framework of its Green Society programme. The revaluation of the participations at fair market value resulted in a plus of 9,5 million in 2016. HTF is responsible for managing the participations, but the beneficial ownership and benefit accrues to Hivos.

The financial impact of the HTF agreement on the income statement can be summarised thus

The HTF agreement provides for three repayments from HTF of 8 million euro from 2016 to 2018 (totalling 24 million euro) and two of 4 million euro from 2019 to 2020 (totalling an additional 8 million euro). It is important to note that the additional revenue has been accrued in 2016 (based on the agreement and in line with accounting rules), but the repayment will be spread over 5 years and also still depend on the financial health of HTF. The availability of the appropriated funds will depend on the cash flow reality.

It is also important to recognise that in the future also downward movement in the value of participations is possible, which could result in impairment adjustments which may result in reversal of some of the revaluation gains accrued in 2016.

The Hivos 2016 report shows still a total amount of 57,4 million euro in assets related to HTF (19,2 million euro in loans and 38,2 million euro invested in participations). Based on the 2016 agreement still 24 million euro is expected to be received over the period 2017-2020 (32 million less the 8 million received in 2016).

If Hivos elects to retain the proceeds of the participations within HTF (invested for the new strategy either as equity in new companies or as loans to SMEs), the proceeds will be converted to loans which will be retained as assets in the Hivos financials (meaning the realisation of cash is deferred but not relinquished).

In the event that Hivos elects to exit the fund, the expected proceeds from the participations are dependent on the value of the investments at the time of retiring the investments, this could result in surplus or loss (based on current values). To mitigate the risk of potential impairment of the HTF participation investments, Hivos has created an appropriated Fund which will absorb any impairments, therefore any downward performance of the investments does not pose any further financial risks for Hivos.

Additional information regarding the impacts of the HTF agreement are elaborated in the notes to the 2016 result.

RESULTS AND RESERVESThe combined impact of the operational surplus and impact of the HTF agreement have contributed towards the attainment of an unusual positive result of 31,3 million of which 30,7 million is appropriated to funds and the balance of 0,6 million flows into the appropriated reserve for business operations.

The Executive Board has recommended the following appropriations for 2016 (total 30,7 million euro)

1. FINANCIAL

MANAGEMENT REPORT

Revaluation of the cancelled HTF

guarantees 22,4 million euro

Unrealised gains from revaluation of

HTF participations

9,5 million euro

Total financial impact of HTF revaluations

31,9 million euro

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• An amount of 21,4 million euro is allocated towards the appropriated fund for programme development and projects/Innovation (funded by HTF income). This contributes to an increase of the programme development fund (at the end of 2016) to 20 million euro and the Hivos innovation fund to 11,4 million euro. The availability of the appropriated programme funds is dependent on the HTF repayments from 2016 to 2020. (8 million each year from 2016 to 2018 and 4 million each year from 2019 to 2020).

• An amount of 9,5 million euro is allocated to the appropriated fund for HTF participations (funded by HTF participation revaluation gains). This contributes to an increase of the HTF participations fund (at the end of 2016) to 38,2 million euro.

• An amount of 1,4 million euro is withdrawn from the appropriated reserve for programme management for ongoing projects implementation , the reserve is stated at 1,5 million (at the end of 2016).

The balance of the result of 0,6 million euro is allocated to the appropriated reserve for business operations which increases to 5,1 million euro at the end of 2016

The reserve for business operations is for meeting extra costs if worse comes to worse and for meeting unforeseen costs and normal, though difficult to predict business risks – currency fluctuations, retrenchment costs, etc. Looking at the volatility in our sector, for example income from governments etc. and the Hivos Social Innovation strategy, Hivos needs to reserve for those uncertainties to assure business continuity.

Within the reserve for business operations Hivos has set aside an amount of 1,0 million for calamities, e.g. ineligible spending by partner organisations, for which donors hold Hivos liable. Within the appropriated programme fund “refunds& interest” Hivos has set aside 25% for calamities. This amount will be reserved for disputed amounts between Hivos and donors. Based on our previous experiences, the Executive Board acknowledges that this amount is still not enough and therefore look to possibilities to bring this reserve to 3 million (at least).

For 2017 Hivos has budgeted a deficit because it prioritises investments in innovation and programme development to contribute to SDGs and Paris climate agreement, next to investments to bring staff and systems up to speed with new standards. This expectation is based on secured income (known per 30 November 2016) and income from applications which are likely to be approved in 2017. The extra investments in innovation and programme development and project under recovery will be covered by the corresponding appropriated reserves. Possible project under recovery will be covered by programme management reserve.

RISKSThe Executive Board observes the need for a policy on management of reserves given the improved level of reserves post 2016, holding the reserves in the bank is not so smart either, given the relatively high level of cash and cash equivalence at the end of 2016. This will receive attention in 2017.

It is however important to recognize the realization of the HTF revaluations are dependent on the value of the participations when sold. In turn, the availability of the appropriated funds will also depend on the realization of the HTF repayments.

In terms of risk appetite, Hivos has an above average appetite when it comes to the results we try to achieve and the capacity of the organisations we engage. We cannot guarantee beforehand that the social changes we aim for will happen, nor can we guarantee that innovations will lead to success. We deliberately work with organisations whose capacity needs to be developed; here again, success is not a given. On the other hand, Hivos is very risk averse when it comes to financial commitments: all our financial commitments towards projects and partner organisations are backed-up by secured funding from donors or our own resources.

With the closure of MFS-2 – the very last payments were done in 2016 and the programme was finalised - Hivos has no longer one dominant and continuous core subsidy, and can no longer benefit from the relative security such a subsidy provides. The MFS-subsidy was also very effectively used to leverage more funding for programmes, as the subsidy could be used as matching fund or to

support cso’s in developing sufficient capacity to deliver results and attract funding from other donors. Also Hivos past core activity of regranting is a diminishing activity, with increased competition, while capacity built in the regions we operate in asks for a transfer of this work to local partners. Finally, in the medium term there is a need for more unallocated or core funding to enable continued investment in innovation and programme implementation and anticipate the need for co-investment or matching funds.

It is therefore to be expected that total income will fluctuate more than before, at the global level, but also within between Hivos’ regional hubs and themes. It may mean that it becomes difficult to retain specific regional and thematic knowledge, which in turn may influence the capacity to attract new funding. To address these risks, Hivos has used the reorganisation process to strengthen its capacity for resource mobilization on the international market, while Hivos is also looking in expanding its income from private individuals and exploring the possibilities of strategic partnering.Each donor has its own requirements and demands, which complicates the task to deliver operational excellence – procedures and regulations often have to be adapted, specific audit protocols followed, etc. – and does not improve efficiency. To address this, Hivos has decentralized tasks and responsibilities and put more emphasis on project management. It has also invested in increased staff capacity to guarantee accountability and improve the capacity to deliver results. Unfortunately, fraud is an unavoidable risk. To minimize fraud and embezzlement, Hivos is going to further intensify the financial intake and monitoring process. It has also introduced a whistle-blowers procedure, which ensures staff and stakeholders of Hivos, partner organisations and suppliers a safe window to share any information they might have about fraud or other irregularities occurring within their organisation.

One of Hivos’ most important assets is its sound reputation. As Hivos is more and more engaged in advocacy, there is a clear risk that other parties feel they’re wrongly portrayed or damaged otherwise by an advocacy campaign. Hivos addresses this risk a.o. by taking extra precautions with publications and other public statements through sound legal proofing and by being well insured.

Finally, a risk with which Hivos is confronted more and more is the shrinking space for civil society. In many countries restrictive NGO-laws and regulations are introduced and freedom of expression is curbed. This affects first and foremost Hivos’ partners, but it has also implications for some of the regional hubs of Hivos, which may lose their license to operate if they continue supporting specific themes and partners. It is a risk disguised as bureaucracy, for which often no straightforward answer exists.

FUTUREThe Executive Board recognises a number of key developments (listed below) that impacted the financial prospects of the organisation in the first months of 2017.

• The Supervisory Council of Hivos approved a total budget of 85,7 million revenue and total spending of 86,9 million euro. The 2017 budget includes investments in projects with under-recovery (for which Hivos receives less than their full cost price) 0,8 million euro; extra investments in fundraising and programme development 1,5 million euro and investments in innovation projects 1,4 million euro.

• These investments are funded by the respective appropriated funds and form part of our financial resilience strategy based on the resource mobilisation plans of the productive units and mainly used to develop new programme proposals. They are needed for a healthy and sustainable portfolio and pipeline

• In the first quarter Hivos received a landmark grant from the Dutch National Postcode Lottery’s Dream Fund for an amount of 14,8 million euro for the “All Eyes on the Amazon” programme that will apply innovative use of drone technology to protect the Amazon forest (2017-2020). This project will be implemented alongside a number of international and local partners, with Hivos in the lead.

• Within the first quarter of 2017 DFID concluded an Assurance audit of the MAVC programme which provided a number of key recommendations which will be implemented by Hivos and its consortium partners over the final months of the programme in 2017. At the same time, USAID informed DFID (the contract

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agency for MAVC) that they were no longer able to fulfil their financial commitment for the project for an amount of US5 million dollars, the financial impacts of this change were (fortunately) mitigated by exchange gains realised between the USD and GBP in the aftermath of Brexit, but Hivos had to scale the implementation budget for the final year downwards by an amount of (about) GBP1,6 million in order to realign with the available resources.

The challenges for the near future are, in financial terms, more or less clear: ensure a stable stream of income, improve our cost-effectiveness, cover all project costs with project income, and be prepared for continuous adaptation, as this will be part of our daily reality. As explained, the reorganisation has addressed these challenges and we feel therefore confident that Hivos can meet them.

The restructured collaboration with HTF and Triodos Bank is very important in that. The proceeds from this agreement will be used to support social innovation initiatives and other programmes of Hivos. As such, these funds will form a highly welcome tool in promoting the social change objectives of Hivos.

Another new instrument that has been implemented in 2016 and will be used in the near future is the company Hivos has established to manage social impact investment funds: Hivos Impact investments. It currently manages two funds, the Mid East Creatives Fund and the Food & Lifestyle Fund. Both funds invest in social enterprises, which seek to open society and create a more sustainable future. Hivos sees social impact investments as a valuable addition to the instruments it has to support and strengthen social change. Any profits from the funds or from the managing company will be used solely for projects and programmes.

The political developments in Europe and the USA seem generally not favourable for the work and objectives of Hivos. Competition for funds, which is already fierce, will probably only increase. At the same time, in many of the countries we work in public opinion (often stimulated or even orchestrated by local authorities) is not very favourable to our work on sexual rights and diversity.

These type of challenges are not new to Hivos. We are used to looking at them as opportunities,– and that is what we will continue to do.

The Hague, May 2017

Edwin Huizing, Executive DirectorSanne Nolst Trenité, Director of Operations

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After appropriation of the results

31-12-2016 31-12-2015

LIABILITIES

Ref. 1)

Reserves

Reserves

Appropriated reserve for business operations 4.063 2.841

Appropriated reserve for business operations - reorganisation 0 600

Appropriated reserve for business operations - programme development

0 500

Appropriated reserve for business operations - calamities 1.000 500

Appropriated reserve for programme management 1.466 2.859

Appropriated reserve for translation differences 300 198

7 6.829 7.498

Funds

Appropriated fund, Private Funds 4.384 3.134

Appropriated fund, Xandra Fund -20 20

Appropriated fund, Nat.Postcode Lottery 1.220 1.274

Appropriated fund, Stop Aids Now! 518 13

Appropriated fund, Refunds + Interest 4.220 3.741

Appropriated fund, Currency valuation 4.142 4.593

Appropriated funds related to The Innovation Station B.V. 450 0

Appropriated funds related to Hivos Impact Investments B.V. 343 0

Appropriated funds related to Hivos Food & Lifestyle Fund 132 0

Appropriated funds related to Hivos Mideast Creatives Fund 71 0

Appropriated fund, HTF participations 38.218 28.670

Appropriated funds for Programme Development & projects 20.000 0

Appropriated funds for Innovation 11.418 0

8 85.096 0 41.445

Reserves and funds 91.925 48.943

Long-term liabilities

General loan fund 0

Participation in North-South Plan 0

Guarantees issued 0 84

0 718 24.372

23.570

Long-term project liabilities 22.822 8.330

Long-term liabilities 9 22.822 32.702

Current liabilities

Current project liabilities 60.553 63.984

Accruals and deferred income 8.403 7.110

Reorganisation 110 1.049

Current liabilities 10 69.067 72.143

Total 183.814 153.788

1) Itemised in Chapter 6: Notes to the consolidated balance sheet as at 31 December 2016

2. CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2016

amounts x EUR 1,000

After appropriation of the results

31-12-2016 31-12-2015

ASSETS

Ref. 1)

Intangible fixed assets

Software for business operations 182 270

Goodwill 3 0

Intangible fixed assets 1 185 270

Tangible fixed assets

Buildings for business operations 532 579

Furniture and fixtures for business operations 403 355

Cars for business operations 38 56

Buildings for objective 429 332

Tangible fixed assets 2 1.402 1.322

Financial fixed assets

Reserved cash 0 20.004

Certificates Triodos Bank/Other Participations 3.000 3.000

HTF Participations 38.218 28.670

Loans 19.647 0

Financial fixed assets 3 60.865 51.674

Claims, prepayments and accrued income

Claims for grants 4 64.804 58.040

Prepayments and accrued income 5 4.769 4.595

Claims, prepayments and accrued income 69.573 62.635

Cash at bank and in hand 6 51.789 37.887

Total 183.814 153.788

1) Itemised in Chapter 6: Notes to the consolidated balance sheet as at 31 December 2016

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Actual 2016 Budget 2016 Actual 2015 Budget 2017

INCOME Ref. 1)

Income from private individuals

Donations and gifts 1.555 2.474 620 2.580

Legacies 763 104

Climate fund CO2 compensation 7 1

Income from private individuals B 2.325 2.474 724 2.580

Income from companies 11 1.425 2.917 1.014

Income from lottery organisations 12 1.350 1.350 1.451

Income from government subsidies 13 79.028 70.918 47.458 80.630

of which MFS-2 grant of Alliance partners 242 3765

Income from other non-profit organisations 14 10.962 9.357

Other income

Income from investments

Dividend HTF participations 1.332 863 934 1.000

Net investment / unrealized exchange gains HTF participations

9.548 3.441

Revaluation BV's -1.029 0

Revaluation HTF Loan Agreement 2016-2020 22.398 0

Exchange risk gain/loss revaluation Balance Sheet -451 3.113

Interest minus bank costs 8 187

Exchange gain/loss of Operations -195 -103

Other income 1.196 23 324 63

Other income 32.807 886 7.895 1.063

Total income D 127.897 77.195 67.798 85.724

1) Itemised in Chapter 7+8: Notes to the Consolidated Statement of income and expense

EXPENSE

Spent on objectives/Programmes (new commitments)

Open Freedom of Expression Ref. 2) 2.898 68.775 37.769 74.289

Actual 2016 Budget 2016 Actual 2015 Budget 2017

Sexual Rights and Diversity 31.639

Transparency & Accountability 19.871

Women's Empowerment 14.822

Green Sustainable Food 6.546 18.909

Renewable Energy 15.937

MFS-2 programmes of Alliance partners 242 3.765

Total expenditure on objectives C 91.955 68.775 60.443 74.289

Costs spent on objective as a % of total income (= C / D) 71,9% 89,1% 89,2% 86,7%

Costs spent on objective as a % of total costs (= C / F) 95,2% 85,6% 93,5% 85,5%

Spent on generating income

Costs of direct fundraising A 306 280 305 536

Direct fundraising: costs as a % of income (= A / B) 13,2% 11,3% 20,8% 20,8%

Income from companies 24 520 235

Income from lottery organisations 22

Income from government subsidies 1.308

Income from other non-profit organisations 181

Other income 13 1.473 1.532 2.706

Total costs of generating income 1.854 2.273 2.072 3.242

Management and accounting costs E 2.809 9.294 2.123 9.338

Man. and accounting costs as a % of total income (= E / F) 2,9% 11,6% 3,3% 10,7%

Total costs F 96.618 80.342 64.639 86.869

Operating Result 31.279 -3.148 3.160 -1.145

Exchange risk Regional Office budget

Extraordinary expense 0 0 0 0

Results before appropriation 31.279 -3.148 3.160 -1.145

Added to/withdrawn from:

- Appropriated reserve for programme management 1.393 4.221

- Appropriated reserve for translation differences -103 -281

- Appropriated reserve for business operations -548 -113

- Appropriated funds for Programmes -1.664 3.000 -3.265 -800

- Appropriated fund for HTF participations -9.548 -3.441

- Appropriated fund for Programme Development & projects/Innovation

-21.406 0 2.892

- Appropriated fund for Hivos BV's 1.219 0

Total addition/withdrawal -30.657 3.000 -2.878 2.092

Results after appropriation 622 -148 282 947

2) Spent on objectives in 2015 has been devided in the following way:

Open GreenGreen Entrepreneurship 18.320 18.320

Rights & Citizenship 16.195 16.195

Expression & Engagement 20.395 20.395

Action for Change 1.768 1.179 589

37.769 18.909

3. CONSOLIDATED STATEMENT OF INCOME AND EXPENSE FOR THE YEAR ENDED 31 DECEMBER 2016

amounts x EUR 1,000

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4. CASH FLOW

STATEMENT FOR THE YEAR ENDED

31 DECEMBER 2016 amounts x EUR 1,000

These are the consolidated annual accounts of Hivos Foundation in The Hague. The annual accounts have been prepared in accordance with the Guidelines for Reporting by Fundraising Organisations and with due observance of the Financial Regulations for subsidies of the Dutch Ministry of Foreign Affairs/Development Cooperation. The annual accounts have been compiled after appropriation of the results. All amounts in the explanatory notes are denominated in euros, except where stated otherwise. The accounting principles have remained unchanged since the previous financial year.

The accounting principles applied to the valuation of assets and liabilities and the determination of results in these financial statements are based on the assumption of continuity of the company.

5.1 GENERAL NOTES

5.1.1 ActivitiesHivos supports more than 400 partners in over 40 countries in Africa, Asia and Latin America. Hivos provides those local private organisations with financial resources, expertise, advice and political support. Hivos also develops programmes of its own, while the Foundation is also active in the field of advocacy, both in the international arena and in the Netherlands. As a partner in coalitions and a broker of contacts Hivos is a member of numerous networks. Civil society building and sustainable economic development make up Hivos’s central policy areas. Its programme is chiefly put into practice by the regional offices in Zimbabwe, Costa Rica, Indonesia and Kenya. Those offices are responsible for an important share of the dealings with partner organisations, which they offer advice and assistance, as well as providing capital, expertise and contacts. Hivos uses a.o. its knowledge programme to encourage parties to gather, exchange and apply expertise for development.

5.1.2 Changes to estimatesNo changes to the estimates have been made.

Using the indirect method 2016 2015

Ref

Cash flow from operating activities

Results before appropriation 1) 31.279 3.160

Movements in reserves and funds 11.703 166

Amortisation and depreciation 2) 388 598

Movements in claims for grants 3) -6.764 62.785

Movements in other claims 3) -174 -1.592

Movements in long-term liabilities 3) -24.372 0

Movements in long-term and current project liabilities 3) 11.061 -59.464

Movements in current liabilities 3) 354 -1.736

Cash flow from operating activities 23.476 3.917

Cash flow from investing activities

Additions to tangible fixed assets 2) -349 -509

Additions to intangible fixed assets 2) -33 -156

Additions to financial fixed assets 2) -9.191 -3.559

Cash flow from investing activities -9.574 -4.225

Cash flow from financing activities

Income from long-term liabilities 0 0

Repaid on long-term liabilities 0 0

Cash flow from financing activities 0 0

Movements in cash at bank and in hand 13.902 -308

Recapitulation

Cash at bank and in hand at end of financial year 3) 51.789 37.887

Cash at bank and in hand at start of financial year 3) 37.887 38.195

Movements in cash at bank and in hand 13.902 -308

1) See Chapter 3: Consolidated Statement of income and expense for 2016 2) See Chapter 6: Notes to the consolidated balance sheet 3) See Chapter 2: Consolidated Balance sheet as at 31 December 2016

5.1.3 ConsolidationThese annual accounts combine the balance sheets and statements of income and expense of the Hivos offices in the separate countries with the annual accounts of the Hivos head office. The Executive Board of Hivos has full control over all those offices. As all the offices use one system, transactions between the separate offices are eliminated. The offices included in the consolidated annual accounts are the following:

Global office (The Hague, the Netherlands)Southern Africa regional office (Harare, Zimbabwe)East Africa regional office (Nairobi, Kenya)Central America regional office (San José, Costa Rica)Southeast Asia regional office (Jakarta, Indonesia)

These annual accounts consolidate the balance sheets and statements of income and expense of the Hivos Foundation (Global office plus regional offices) and the Hivos private limiteds of which Hivos is 100% shareholder:Hivos Impact Investments B.V.Food & Lifestyle Fund B.V.Mid-East Creatives Fund B.V.

5.1.4 Notes to the cash flow statementThe cash flow statement has been prepared using the indirect method. The financial resources in the cash flow statement comprise cash at bank and in hand. Cash flows denominated in foreign currencies have been translated at an average exchange rate. Interest income and expense is included in the cash flow from operating activities. Transactions that do not involve any incoming or outgoing cash flows are not presented in the cash flow statement.

5.1.5 EstimatesTo apply the accounting principles and rules for compiling the annual accounts, the Managing Board of Hivos is required to form opinions about various matters and to make estimates that might be essential for the amounts presented in the annual accounts. Estimates have been made regarding the collectability of claims. Hivos is not exposed to any risks to its results in this respect, since

5. ACCOUNTING

PRINCIPLES

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Fundraising Organisations, VFI: spent on objectives / generating income / management and accounting costs.

Wages, salaries and social security charges are presented in the statement of income and expense in accordance with the terms of employment, insofar as they are payable to employees.

5.3.6 PensionsHivos presents all its pension schemes as defined contribution schemes. The premiums payable for the reporting year are presented as an expense.

5.3.7 Translation differencesCurrency translation differences stemming from the settlement or translation of monetary items are presented in the statement of income and expense during the period in which they emerge.

5.3.8 Amortisation of intangible assets and depre-ciation of tangible fixed assets

Intangible fixed assets, including goodwill, and tangible fixed assets are amortised and depreciated from the moment that they are taken into use, over the expected remaining useful life of the asset. Land and investments in property are not depreciated. If the estimated remaining useful life changes, the future amortisation and depreciation are adjusted accordingly.

5.4 FINANCIAL INSTRUMENTS AND RISK MAN-AGEMENT

5.4.1 Currency riskAll program activities within Hivos are done in EUR, USD or GBP. To minimize the currency risk all partner contracts are financed in the same currency as the donor contract, if the currency of the donor contract is EUR, USD or GBP. In case a donor grants Hivos funds in a different currency than EUR, USD or GBP a translation is made to one of the three currencies and received funds are exchanged as soon as they are received.

For the regional offices, a monthly exchange rate is included, based on the information provided by the local governments (national banks).

5.4.2 Credit RiskHivos does not have any significant concentrations of credit risk. With regards to the participation, overall management of the participations lies with the Hivos Triodos Fund. To minimize the financial risk for Hivos an appropriated fund within the liabilities has been created in which any changes of the value of the participation is included or deducted.

programme management fee is held in the appropriated reserve for programme management. The portion of the programme income that has not yet been spent is added to the appropriated reserve for programme funds.

5.2.10.b Appropriated funds for programmesAll sums that are received during a given year and that relate to a specific appropriated fund are added to the funds. The programme liabilities (including the programme management fee realised) are added to the funds.

5.2.11 Long-term liabilities and other liabilitiesUpon initial recognition, long-term liabilities are presented at fair value and are denominated in euros.Liabilities denominated in foreign currencies have been translated at the last available exchange rates as at the balance sheet date. Any translation differences are taken to the statement of income and expense. Project liabilities represent all liabilities that the Foundation has in connection with financing agreements entered into with partner organisations.

5.3 PRINCIPLES FOR DETERMINATION OF THE RESULTS

5.3.1 GeneralIncome and expense are allocated to the period to which they pertain in the statement of income and expense. This allocation is based on consistent practices. The balance sheet is compiled with due consideration of the amounts that pertain to a particular period but were received or paid during another period. Losses are presented as soon as they are foreseeable; income is presented as it is realised.

5.3.2 LegaciesLegacies are presented in the year during which their value can reliably be determined.

5.3.3 Grant incomeGrant income, including the programme management fee, is recognised in the year in which the entitlement becomes definite. Changes to the value of grants are added to or deducted from the grant income during the year in which the grant awarded changes.

As Hivos follows the Dutch Accounting Standard 650 as described in paragraph 5.2.1, income from direct fundraising is recognised in the year it has been received. For all other income, the new commitments signed in a certain year form the basis.

5.3.4 Project liabilitiesProject liabilities are presented in the year during which the liability becomes definite.

5.3.5 CostsAll costs, with the exception of extraordinary items, are allocated to the various cost categories, based on business criteria and with due observance of the relevant Guidelines of the Dutch Association of

Other fixed assets are presented at acquisition or manufacturing price including any directly attributable costs, less straight-line depreciation calculated over the estimated remaining useful life and less impairments.

5.2.6 Financial fixed assets5.2.6.1 Reserved CashReserved cash refers to cash held as security for liabilities, as required by the Dutch Ministry of Foreign Affairs/Development Cooperation’s guidelines for loans and guarantees.

5.2.6.2 Certificates / Participations Participations in partner organisations are valued at fair value taking into account possible impairments at reporting date

5.2.7 Claims for grants and other claimsClaims for grants refer to claims on governments and other authorities arising from liabilities into which the Foundation has entered based on agreements to that effect as part of its programme; these amounts include the related programme management fee.

Upon initial recognition, other receivables are presented at the fair value of the consideration, expressed in euros. Allowances for bad debts are deducted from the claim’s book value.

5.2.8 Cash at bank and in handCash at bank and in hand is presented at face value and is denominated in euros.

5.2.9 ProvisionsProvisions are formed for liabilities and risks connected to the business operations. They do not pertain to specific assets. Provisions are presented at the best estimate of the amounts needed to settle the liabilities as at the balance sheet date. Provisions are presented at the face value of the projected expenditure required to settle the liabilities, unless stated otherwise.

5.2.10 Reserves and funds5.2.10.a Appropriated reservesAppropriated reserve for business operationsThe appropriated reserve for business operations contains two different types of reserves; Continuity reserve for business operations and Calamities

The continuity reserve is meant to create a sufficient-size buffer that can be used to complete pending programmes appropriately including staffing them with own people, if one or more key sources of funding were to dry up unexpectedly, and with due observance of existing legal and moral obligations. The reserve for calamities will be used for claims from donors in cases of fraud or otherwise prematurely terminated projects. The appropriated reserve for business operations is freely disposable.

Appropriated reserve for programme managementProjects approved during the reporting year are presented as expenses. The corresponding grants are presented as income, including the programme management fee. The unrealised

the liabilities balancing the claims need not be paid if a claim proves to be a bad debt.

5.2 VALUATION PRINCIPLES

5.2.1 GeneralThe annual accounts have been prepared in accordance with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code and the firm pronouncements set out in par. 650 of the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards Board.

As a rule, assets and liabilities are presented at acquisition or manufacturing price or at current value. If no specific valuation principle is given, valuation is based on the acquisition price. The balance sheet, statement of income and expense and cash flow statement include references to the explanatory notes.

5.2.2 Comparison with the previous yearIn the annual accounts a comparison with previous years have been made

5.2.3 Foreign currencies5.2.3.1 Functional currencyItems included in the financial statements of regional offices are measured using the currency of the primary economic environment in which the respective office operates (the functional currency). The consolidated financial statements are presented in euro, which is the functional and presentation currency of Hivos.

5.2.3.2 Foreign currenciesAssets denominated in foreign currencies have been translated at the exchange rates prevailing as at the balance sheet date. Translation differences are taken to the statement of income and expense.

5.2.3.3 Group companies/Regional OfficesAssets and liabilities of consolidated subsidiaries with a functional currency different from the presentation currency are translated at the rate of exchange prevailing at the balance sheet date; income and expenses are translated at average exchange rates during the financial year. Any resulting exchange differences are taken directly to the legal reserve for translation differences within equity.

5.2.4 Intangible fixed assetsIntangible fixed assets are presented at acquisition price less amortisation. The amounts presented take into account the effect of impairment.

5.2.5 Tangible fixed assetsLand and buildings are presented at acquisition price plus additional costs or manufacturing cost less straight-line depreciation calculated over the estimated remaining useful life. The amounts presented take into account the effect of any impairment that is expected as at the balance sheet date. No provision for major repairs has been formed for the costs of major repairs to the buildings.

18 19

1) The offices premises with land and gardens in The Hague, at Raamweg 15 and 16, listed in the Land Register as Municipality of The Hague,section X, number 472, 5 ares and 55 centiares in size, and number 522, 5 ares and 55 centiares in size, were purchased for €635.292 in 1987 The value for purposes of the Dutch Valuation of Immovable Property Act (Wet waardering onroerende zaken) in 2016 was €1.075.000.

2) The office premises in Harare, stand 2956, Salisbury Township, 2855 centiares in size, was purchased for €76.245 at the end of 1994. 3) The office premises in San Jose, District 09, Pavas Canton 01 (norte: Victor Rosabal, sur: Calle Publica, este: cia Agricola Roberth SA,

oeste: Hilda Herrera) , 512 m2 in size, was purchased for $325.000 in 2015.

ASSETS

1 Intangible fixed assetsThe accumulated acquisition prices of and amortisation on the fixed assets as at 31 December are as follows:

acquisition price

disposals acquisition price

accumulated amortisation

disposals accumulated amortisation

book value additions amortisation book value

01.01.2016 2016after disposals

31.12.2016 01.01.2016 2016after disposals

31.12.2016 01.01.2016 2016 2016 31.12.2016Intangible assets for business operations

software (4 years) 1.804 0 1.804 1.535 0 1.535 270 30 117 182

Goodwill 0 0 0 0 0 0 0 4 1 3

Total intangible fixed assets 1.804 0 1.804 1.535 0 1.535 270 33 118 185

2 Tangible fixed assetsThe accumulated acquisition prices of and depreciation on the fixed assets as at 31 December are as follows:

acquisition price

disposals acquisition price

accumulated depreciation

disposals accumulated depreciation

book value additions depreciation book value

01.01.2016 2016after disposals

31.12.2016 01.01.2016 2016after disposals

31.12.2016 1.1.2016 2016 2016 31.12.2016Tangible assets for business operations

buildings (10-50 yrs) 1.404 0 1.404 825 0 825 1) 579 21 67 532

furniture and fittings (3-10 yrs) 1.179 0 1.179 824 0 824 356 223 176 403

cars (5 yrs) 109 0 109 53 0 53 56 0 18 38

Tangible assets for objective

building in Harare (50 yrs) 106 0 106 62 0 62 2) 44 0 2 43

building in San Jose (50 yrs) 291 0 291 4 0 4 287 106 7 386

Total tangible fixed assets 3.089 0 3.089 1.768 0 1.768 1.322 349 270 1.402

6. NOTES ON THE BALANCE SHEET

2016 amounts x EUR 1,000 1)

20 21

3 Financial fixed assets

- Reserved cash 1.1.2016 Added Withdrawn 31.12.2016

Hivos's bank accounts, North-South Plan 970 0 970 0

Deposit & guarantee for Hivos's bank accounts 19.035 0 19.035 0

Total reserved cash 20.004 0 20.004 0

- Certificates Triodos Bank/Other Participations 1) 1.1.2016 Added Withdrawn 31.12.2016

Certificates Triodos Bank 3.000 2) 3.000

1) The particiaptions held at the BV’s are valued at zero, and therefore not included in the Balance Sheet 2) Related to: Triodos Bank N.V., 43,817 depositary receipts of shares with a purchase value of € 2,999,932

The net asset value of these depositary receipts as at 31/12/2016 was €3.592.994

- HTF Participations 1.1.2016 Added Withdrawn 31.12.2016

HTF Participations 28.670 9.548 1) 38.218

1) Adjustment of the market valuation of the HTF participations

The Hivos-Triodos Fonds (HTF) participates in local credit institutions in the South. As Hivos is the economic owner, all income related to these participations are for Hivos. Because of this economic ownership the participations are included in the financial fixed assets for the actual value per 31-12-2016The breakdown of the HTF participations valuations per 31.12.2016 are as follows:

Company Geography Ownership % 31.12.2015 Ownership % 31.12.2016

Africap South Africa 2,07% 160 2,07% 98

Akiba Bank Tanzania 7,94% 805 7,94% 1.419

Banco Solidario Ecuador 1,23% 1.086 1,23% 1.209

Bank Andara Indonesia 15,51% 996 9,30% 2.595

Bellwether India 21,73% 2.658 18,77% 5.106

Centenary Uganda 18,29% 19.541 18,29% 23.266

Eco E II Costa Rica 7,09% 1.039 7,53% 1.858

LeapFrog South Africa 1,85% 1.566 1,85% 1.762

MFX Solutions USA 4,26% 342 3,52% 208

Novastar Mauritius 3,67% 480 3,73% 698

28.670 38.218

Note 1: Hivos applies a slightly different valuation policy than HTF for establishing the fair market value. Valuation by HTF is € 62.411 higher.

Note 2: The HTF participations are bought with a subordindated loan, which is not shown at the Balance Sheet as this is part of the value of the participations The value of this subordinated loan was at year end 2016: € 13.622.908

- Loans 1) Interest % Duration 31.12.2015 Added Withdrawn 31.12.2016

Hivos Triodos Fund Subordinated Loan 3% interest-only 0 10.013 8.000 2.013

Hivos Triodos Fund Subordinated Loan (A) 0% interest-only 0 4.500 0 4.500

Hivos Triodos Fund Subordinated Loan (B) 0% interest-only 0 12.684 0 12.684

The Innovation Station BV (loan 1) 0% 5 years 0 300 0 300

The Innovation Station BV (loan 2) 5% 5 years 0 150 0 150

0 19.647

1) The loans held at the BV’s are valued at zero, and therefore not included in the Balance Sheet

22 23

4 Claims for grantsAll outstanding claims at year-end concern claims on donors and are as follows:

31 December 2015 31 December 2016

Total Remaining term > 1 year

Total Remaining term > 1 year

Income from companies 483 15 9.249 576

Income from government subsidies 57.778 35.991 52.173 24.083

Income from other non-profit organisations -220 -465 3.382 4.689

58.041 35.541 64.804 29.348

5 Prepayments and accrued incomePrepayments and accrued income as at 31 December can be broken down as follows: All items have a remaining term of less than one year

2015 2016

Debtors not including grants 2.524 3.620

Current account between head office/regional offices 627 59

Prepayments (employees/travelling) 169 173

Project prepayments 883 0

Receivable (and prepaid) 384 918

Other 7 0

4.595 4.769

The fair value of the receivables approximates the book value, due to their short-term character.

6 Cash at bank and in handCash at bank and in hand is at the Foundation’s disposal. Cash at bank and in hand can be broken down as follows:

31 December 2015

31 December 2016

In hand 6 4

Bank 37.881 51.785

37.887 51.789

Assets and claims not included on the face of the balance sheet: Hivos is the registered owner of 6.055  Gold Standard Verified Emision Reductions (VER), The Gold Standard VERs are purchased and sold in the framework of the Renewable Energy/biogas programmes, to strenghten the financial sustainability of the programmes- Hivos is the only shareholder in ACES Biogas Ltd, a private limited in Uganda, which aim is to provide carbon finance services to

suppliers of biogas systems in Africa, public education, promotion of greenhouse gas emission reductions and greenhouse gas emission reduction certificate selling activities. 

This exludes the purchase and sale of certificates on behalf of the company.

LIABILITIES

7 Reserves

The reserves serve to guarantee the continuity of the business operations in the short and medium term.

Appropriated reserve for business

operations

Appropriated reserve for

programme management

Appropriated reserve for translation

differences *) Total reservesBalance as at 1 January 2016 4.441 2.859 198 7.498

Added 1.722 4711 103 2.296

Withdrawn 1.100 1.8642 2.964

Total movements in 2016 622 -1.393 103 -669

Balance as at 31 December 2016 5.063 1.466 300 6.829

*) The Hivos offices abroad use local currencies. For consolidation into the Hivos annual accounts, which are denominated in euros, the 2015and 2016 end-of-year exchange rates have been used for the balance sheet. The average exchange rate for 2016 has been used for the statement of income and expense. The resulting differences are settled in the reserve for translation differences. As this differences does not represent a real profit or loss, the reserve can have a negative balance at year end according to par 650 of the Guidelines for Annual Reporting.

1) Approved programme management fee2) Realised programme management fee

Appropriated reserve for business operations 01/01/16 Withdrawn/Added

from results

Withdrawn from

reserve

31/12/16

Continuity reserve for business operations 2.841 1.222 4.063

Reorganisation 600 600 0

Calamities 500 500 1.000

Programme Development 500 500 0

Balance as at 31 December 4.441 1.722 1.100 5.063

Restricted purpose of reserve for business operations:Continuity reserve for business operations: to guarantee the continuity of the organisationCalamities: to be used for claims of donors

24 25

8 Funds

Programme funds Income Category 01/01/16 Added Withdrawn 31/12/16

Private Funds Income from private individuals 3.134 2.7711) 1.5212) 4.384

Xandra Fund Income from private individuals 20 101) 502) -20

National Postcode Lottery (NPL) Income from lottery organisations 1.274 1.3501) 1.4042) 1.220

Stop Aids Now! (SAN!) Income from other non-profit organisations

13 4071) -982) 518

Refunds and interest Other income 3.741 5641) 852) 4.220

Currency valuation all categories 4.593 2.461 2.912 4.142

The Innovation Station B.V Income from companies 0 450 0 450

Hivos Impact Investments B.V. Income from companies 0 525 1823) 343

Hivos Food & Lifestyle Fund B.V. Income from companies 0 550 4183) 132

Hivos Mideast Creatives Fund B.V. Income from companies 0 500 4293) 71

HTF participations Income from companies 28.670 9.548 02) 38.218

Programme Development Income from companies 0 20.000 02) 20.000

Hivos Innovation Fund Income from companies 0 12.000 5822) 11.418

Balance as at 31 December 41.446 51.135 7.485 85.096

1) Additions represent the income for 20162) Withdrawals represent the new programme liabilities for 2016 3) BV’s are valued at Net Asset Value, amounts added represent the Historical Cost Price, withdrawals the corrections on this including

result in 2016

Restricted purpose of programme funds: Private Funds: funds for CO2 compensation are used for renewable energy projects; earmarked private donations are used for the projects mentioned; unearmarked donations will be used in 2016 and later, to finance innovations and sensitive projects for which no donor can be found.NPL: to be used for the objectives of the organisation, to finance social innovations and sensitive projects for which no donor can be foundSAN!: to be used for Hiv/AIDS projects Refunds and interest: to be used in 2017 and later, to finance innovations and sensitive projects for which no donor can be found; 25% of the fund is reserved for calamitiesCurrency valuation: to be used for revaluation of donor funds with source currencies other than euroProgramme funds related to BV’s: to be used when BV’s are sold for the objectives of the organisation.These investments are financed from MFS-funding and therefore included as a fundHTF participations: to be used for participations in microcredit- and financial institutions in the framework of Hivos’ Green programmeProgramme Development: financed from the HTF 2016-2020 loan agreement, to be used for Programme Development.These investments are financed from MFS-funding and therefore included as a fundHivos Innovation Fund: financed from the HTF 2016-2020 loan agreement, used forsocial innovations for which no donor can be found.These investments are financed from MFS-funding and therefore included as a fund

9 Long-term liabilitiesHivos’s long-term liabilities comprise project liabilities with terms of more than 1 year plus other liabilities.

Long-term liabilities 01/01/16 Added Withdrawn 31/12/16

General loan fund 84 84 0

Participation in North-South Plan 718 718 0

Guarantees issued 23.570 23.570 0

24.372 0 24.372 0

Long-term project liabilities Balance as at 31-12-2016

Payment obligation beyond 2017

Payment obligation beyond 2018

Payment obligation beyond 2019

Income from companies 211 211 0 0

Income from government subsidies 19.921 16.211 1.851 1.859

Income from other non-profit organisations 2.690 1.513 603 574

22.822 17.935 2.454 2.454

10 Current liabilitiesHivos’s current liabilities comprise project liabilities payable within 1 year plus other liabilities. Accruals and deferred income as at 31 December can be broken down as follows:

2015 2016

Project payments 63.984 60.553 47

Creditors - Hivos- Within BV’s- General loan fund/

North-South Plan

1.3250

0

1.662177

802

Open amounts related to salaries 90 18

Outstanding costs 1.647 1.782

Outstanding project payments (other) 1.689 2.235

Payments in transfer 961 53

Payable taxes 1.206 1.326

Other 192 349

Reorganisation Provision 1.049 110

72.143 69.067

Pension charges:Stichting Hivos has a pension scheme with PFZW pension fund to which the provisions of the Dutch Pension Act (‘Pensioenwet’) is applicable. Stichting Hivos pays premiums based on (legal) requirements, a contractual or voluntary basis to pension funds and insurance companies. Premiums are recognised as employee cost when they are due. Prepaid contributions are recognised as deferred assets if these lead to a refund or reduction of future payments. Contributions that are due but have not yet been paid are presented as liabilities. For existing obligations (other than premiums to be paid) to the pension fund or employees a provision is recognised

Commitments and contingencies not included on the face of the balance sheet:The following long-term rental agreements have been entered into:- Rental copy and printing equipment. Lessor: Pci Netherlands (Dantuma).

The rental obligation until 05-04-2017 is € 25,541 per year (price level for 2015).

26 27

Realisation 2016 Realisation 2015

11 Income from companies 1)

Palladium International Pty Ltd 698 0

MyClimate 456 344

HEIFER PROJECT INTERNATIONAL INC 134 0

NRECA International Limited 112 0

Climate Neutral Group 0 328

Other income from companies 25 342

Income from companies Total 1.425 1.014

12 Income from lottery organisations

Nationale Postcode Loterij (NPL) 1.350 1.350

13 Income from government subsidies 2)

The Global Fund 29.731 3.956

Ministry of Foreign Affairs The Netherlands 26.046 28.462

Department for International Development (DFID) 10.819 1.994

Millennium Challenge Account - Indonesia 4.280 0

Deutsche Gesellschaft für Internationale Zusammenarbeit 3.860 0

Swedish International Development Agency 3.551 6.193

US Department of State 655 46

Other government subsidies 87 6.806

Income from government subsidies Total 79.028 47.458

7. NOTES TO THE STATEMENT OF

INCOME AND EXPENSE FOR THE YEAR ENDED 31 DECEMBER 2016

amounts x EUR 1,000 1)

14 Income from other non-profit organisations 3)

William and Flora Hewlett Foundation 2.821 4.669

Agentschap NL (Senternovem) 1.573 127

Inter-American Development Bank 1.521 0

Oxfam Novib 1.235 35

King Baudouin Foundation United States 795 358

Practical Action 649 0

Tides 531 298

Rutgers Kenniscentrum Seksualiteit 495 0

Stop Aids Now! (SAN) 424 500

Open Society Institute (OSI) 257 -4

NWO/WOTRO 255 0

Common Fund for Commodities 218 296

Other non-profit organisations 188 3.078

Income from other non-profit organisations Total 10.962 9.357

92.765 59.180

1) Income from companies, only amounts bigger than EUR 100k are shown 2) Income from government subsidies, only amounts bigger than EUR 500k are shown 3) Income from other non-profit organisations,only amounts bigger than EUR 200k are shown

28 29

Appropriation Objective Total 2016 Budget 2016 Total 2015

Open Green

Expense Freedom of Expression

Sexual Rights and Diversity

Transparency & Account-ability

Women’s Empower-ment

Sustainable Food

Renewable Energy

MFS2 alliantie partners

Totalobjective

Totalincomeraised

Totalmngt. &account.

Grants and contributions 2.338 25.528 16.033 11.959 5.282 12.858 242 74.240 74.240 56.054 45.098

Publ. and communication 27 299 188 140 62 151 0 867 224 157 1.248 894 720

Employee costs 447 4.876 3.062 2.284 1.009 2.456 0 14.134 1.368 2.225 17.727 19.509 15.696

Costs of housing 13 143 90 67 29 72 0 414 40 65 519 692 557

Office and general expenses 64 702 441 329 145 353 0 2.034 196 320 2.550 2.499 2.011

Amortisation, depreciation and interest 8 92 58 43 19 46 0 266 26 42 334 694 558

Operating costs 559 6.112 3.839 2.863 1.264 3.078 0 17.715 1.854 2.809 22.378 24.288 19.541

Totals 2.897 31.640 19.872 14.822 6.546 15.936 242 91.955 1.854 2.809 96.618 80.342 64.639

Employee costs: 2016 2015

The breakdown of the employee costs for 2016 are:

Salaries 13.934 10.839

Social Security 1.169 1.739

Pension 867 1.150

Temporary employees 866 628

Other employee costs 890 1.339

Total 17.727 15.696

Total contracted employees:

The average contracted employees during year 2016 was:

Hivos Global Office 137 139

Hivos Regional Offices 247 202

Total 384 341

Independent auditor costs:

The breakdown of the independent auditor costs for 2016 are:

Annual accounts 321 203

Ministry Foreign Affairs MFS II subsidy 24 10

Project audits 29 21

Fiscal advice 12 3

Total 386 237

8. NOTES TO THE CONSOLIDATED

ALLOCATION OF EXPENSE FOR THE YEAR ENDED

31 DECEMBER 2016amounts x EUR 1,000 1)

30 31

BUDGET VERSUS ACTUAL FIGURES

Consolidated Statement of income and expense for 2016IncomeActuals 2016: 127,9 million; budget 2016: 77,2 million; actuals 2015: 67,8 million

The total income available for Hivos’s objectives was 127,9 million in 2016; this is a difference of 50,7 million compared to the budget of 2016. The difference between the actuals and budget is mainly caused by the new agreement 2016 – 2020 between Hivos and HTF. This positive impact is 31,9 million and is disclosed under Other income. Apart from the difference because of the new agreement between Hivos and HTF, there is an additional difference of 18,8 million between the actual income and budget. This is caused by more income from government subsidies, from non-governmental organizations and other non-profit organizations. Hivos acted as a channel for its former subsidiary Twaweza for a subsidy of 2,8 million (USD 3,0 million). This grant was not budgeted, and is also in its entirety transferred to Twaweza. A comprehensive overview can be found at chapter 7. Notes to the Consolidated Statement of income and expense.

Several grants are coming indirectly from governments, such as Voice (Dutch government), for which OxfamNovib is the lead agency, MCI or a subsidy from Palladium (Indonesia), which acts on behalf of the Australian government.

Income from private individuals, lottery organizations and companies were in line with the expectations.

A part of Hivos’s income consists of foreign currency. The GBP and USD are subsequently regranted in GBP and USD. The functional and presentation currency for Hivos’ annual accounts is euro, hence there are exchange rate differences. This resulted in a negative difference of 0,5 million.

ExpenseActuals 2016: 96,6 million; budget 2016: 80,3 million; actuals 2015: 64,6 million

The total expenditure of Hivos came to 96,6 million in 2016 (including the contributions for Hivos Alliance members). Compared to the budgeted expenditure of 80,3 million it is exceeded with 16,6 million.

The expenditure on Hivos’ objectives and/or programmes exceeded with 23,2 million.2016 is the first full year for the programmes Open Society and Green Society. The two themes of Green Society, Renewable

Energy and Sustainable Food, performed less than budgeted. The theme Freedom of Expression performed also less than expected. For the realization of its budget, Hivos is dependent on the success of its applications. Especially for Sustainable Food and Freedom of Expression this has proven to be difficult.

Costs of direct fundraising came to 0,3 million slightly above budget as result of a pilot to achieve a higher number of regular private donations. The costs of direct fundraising are composed of the following elements: • the full employee costs for the staff responsible for direct

fundraising (1.8 FTE) plus• a mark-up per FTE for material costs (accommodation, office

supplies, ICT).

The mark-up is calculated by translating the total of the relevant material costs to Hivos’ total employee costs. Costs of mailing campaigns and other promotional material are also allocated to this item.

Costs of generating income on governments, other non-profit organizations, lotteries and other were 0,4 million less than the budget, because the costs of preparing the applications for several project extensions could be accounted for under the existing programme. The costs of generating income on governments, other non-profit organizations, lotteries and other are considerably higher than the costs of direct fundraising, but as a percentage of funds raised the costs are considerably lower. The costs generating income on governments, other non-profit organizations, lotteries and other are allocated based on the actual consumed time and the actual costs.

The management and accounting costs remained 6,5 million beyond the budgeted amount. This due to the fact that in the budget not all overhead expenditures were allocated to spent on objectives/programmes as Hivos did in the actual amount. Management and accounting costs are allocated in accordance with the guideline of the Dutch Association of Fundraising Organisations (VFI). The employee costs for the Executive Director and the executive secretariat, for quality control and internal controls and for the Finance department are allocated entirely to management and accounting. The proportion that these positions represent in the overall workforce at the head office is then used to allocate the employee costs for the Human Resources department. The costs of the ICT and Facility Management department are allocated based on the number of jobs.

Results before and after appropriationHivos realised a positive operating result of 31,3 million before appropriation. After appropriation a positive result remained of 0,6 million which will be added to the continuity reserve for business operations.

9. NOTES TO THE RESULTS

FOR 2016

Movements in the appropriated reserves and fundsAn amount of 1,4 million has been withdrawn from the appropriated reserve for programme management. In previous years these funds were set aside and earmarked by the respective project budgets for this purpose. During the year no additions were made to the appropriated reserve for programme management. Instead, the amounts agreed with donors and reserved in project budgets for Hivos operating costs are now directly allocated to the projects and committed on an annual basis, i.e. not upfront.

The amount resulting from the revaluation of the adjustment of the market value of HTF participations has been added to the appropriated fund HTF participations. The resources in appropriated funds may only be used for programmes. The appropriated funds for Private funds, Nat. Postcode Lottery, Stop Aids Now!, and Refunds & Interest remained at the same level or increased.

The appropriated fund for currency valuation noted a decrease, because of the loss of GBP against the euro. Since Hivos issues the contracts with partner organisations in the same currency as the contract with the donor, the devaluation of the GBP against the euro does not affect Hivos operations financially. It may result in lower output as in the devaluation can result in less local currencies available and hence less activities.

In 2016, Hivos introduced several new appropriated programme funds. The funds for the innovation Station, Hivos Impact Investments, Food & Lifestyle Fund and Mid East Creatives Fund have been created to allow for the appropriation of the private Limited’s Hivos has established. Hivos has established these private Limited’s in the framework of its programmes. Any profit therefore will be used for projects and programmes and will be appropriated to these funds. Similarly, any losses or impairments related to the investments will be similarly appropriated to these reserved funds. A comprehensive overview can be found at chapter 6. Notes to the Consolidated Balance sheet items 7 Reserves and 8 Funds.

WorkforceWorldwide Hivos’ workforce went from 341 FTE to 362 FTE.Approximately 65% of the workforce is based at the regional and country offices, where they are responsible for programme management (selecting and monitoring partner organisations) and programme development. The duties of the head office staff in The Hague include programme and policy development, resource mobilisation, programme management for MENA and worldwide programmes, central services such as finance and control, ICT and quality systems and corporate communication and knowledge management.

32 33

The Supervisory Council determines the remuneration policy, the amount of the remuneration of the Executive Board and the amounts of the other elements of remuneration. Following an assessment in 2011, this parcel was once more confirmed in 2012, in accordance with the Remuneration Committee’s advice. The Supervisory Council bases its decision on the VFI Advisory Regulations for the Remuneration of Directors of Charities, which use weight criteria to determine maximum standards for annual incomes. As a consequence, the remuneration policy and the amount of the remuneration of the Executive Board fall within the scope defined in the guidelines of the Wijffels Code and within the standard defined bythe Dutch Ministry of Foreign Affairs for MFS co-financing organisations. The latter compliance is examined separately by the independent auditor as part of the MFS report. The relevant actual annual incomes of the Executive Board for 2016 were € 118,039 (1,0556 fte/12 months) for the Executive Director Mr E Huizing and € 81,545 (1 fte / 11 months) for the Director of Operations Ms S.W. Nolst Trenité.The VFI Guidelines have been followed, and the remunerations remained below the relevant ceilings (Wijffels Code, VFI, MFS organisations).

The amounts and composition of the remuneration is shown in the table below.

Name E.Huizing S.W. Nolst Trenité

Title Executive Director Director of Operations

Employment

Type of contract (duration) 5 years permanent

hours 38 36

part-time percentage 105,56% 100,00%

period 1/1-31/12 1/2-31/12

Remuneration (EUR)

Annual income

gross wages/salary 109.295 75.505

holiday allowance 8.744 6.040

end-of-year bonus, 13th/14th month 0

variable annual income 0

Total 118.039 *) 81.545 *)

Social security charges (employer's contribution) 9.265 8.492

Taxable allowances/additions

Pension charges (employer's contribution) 14.914 9.649

Other future remuneration

End-of-employment payments

Total remuneration for 2016 142.218 99.686

Total remuneration for 2015 134.805

*) Relevant for DG standard of the Dutch Ministry of Foreign Affairs

10. REMUNERATION OF THE EXECUTIVE BOARD (VFI)

34 35

11. REMUNERATION OF THE

EXECUTIVE BOARD (WNT)Report pursuant to the Dutch Remuneration of Senior Executives in the Public and Semi-Public Sector (Standardisation) Act (Wet normering bezoldiging topfunctionarissen publieke en semipublieke sector, ‘WNT’)

Notes on the preparation of the WNT reportThe report pursuant to the WNT presented in this section is based on the Dutch Policy Rules for Application of the WNT (Beleidsregels toepassing WNT) of 26 February 2014,including the amendment of 12 March 2014, as issued by the Dutch Ministry of the Interior and Kingdom Relations. The remuneration maximum according to WNT in 2016 for Hivos is € 168.000

Other reporting obligations WNT In 2016 there were no other employees that had a remuneration above the applicable WNT maximum. There also were no employees for which a listing based on WOPT or WNT should have been done.In 2016 no severance payments were done to other employees that based on the WNT should be included in the list above

AssessmentMovement in the reservation for outstanding leave entitlement not included in the remunerations presented above to be recognised in this assessment in accordance with the applicable regulations.E Huizing: movement in reservation for outstanding leave entitlement for 2016 is EUR 3.644S. Nolst Trenite: movement in reservation for outstanding leave entitlement for 2016 is EUR 1.666

2016Remuneration of senior executives & former senior executives - with employment contracts 2016

title Name BoD/SC (T)On payroll (L) or External (E)

Former Senior Executive?

date from 1 date to2 part-time %3 Nr of days in year

WNT- maximum

fixed remuneration

variable remuneration

taxable fixed and variable

expense allowances

provisions for future

remunera-tions

Total remuneration

type of variable

remuneration

Executive Director

E. Huizing L No 01/01/16 31/12/16 100,00% 366 168.000 117.742 14.914 132.656

Director of Programmes and Projects

S. Nolst Trenite L No 01/02/16 31/12/16 100,00% 335 153.770 80.674 9.649 90.324

Remuneration of Supervisory Council members - no employment contracts

title Name BoD/SC (T) On payroll (L) or External (E)

Former Senior Executive?

date from1 date to2 part-time %3 Nr of days in year

WNT- maximum

fixed remuneration

variable remuneration

taxable fixed and variable

expense allowances

provisions for future

remunera-tions

Total remuneration

type of variable

remuneration

Voorzitter Mr. J.E.C. de Groot

T No 01/01/16 31/12/16 15,00% 366 25.200 1.659 1.659

Lid 1 Ms A. van Gorsel

T No 01/01/16 31/12/16 10,00% 366 16.800 1.422 1.422

Lid 2 Prof. M. Baud T No 01/01/16 31/12/16 10,00% 366 16.800 1.185 1.185

Lid 3 Dr. J. van de Ven

T No 01/01/16 31/12/16 10,00% 366 16.800 1.422 1.422

Lid 4 Mr. A.P. Mesker T No 01/01/16 31/12/16 10,00% 366 16.800 - -

Lid 5 Mr. M. Karman T No 01/01/16 31/12/16 10,00% 366 16.800 - -

Lid 6 Mr. V. Vivekanandan

T No 01/01/16 31/12/16 10,00% 366 16.800 474 474

Lid 7 Ms. C.R. Hibbs T No 01/01/16 31/12/16 10,00% 366 16.800 474 474

36 37

EUR-Contracts

Donor Group Donor Fund # Donor Reference #Currency Fund

Fund ReceivedCon-tracted

Spent (-)

European Union Delegation of the European Union 1000001 9.ACP.RPR.49, no 12 EUR 1.162 895 936 936

1000007 ASIE/2009/202-578 EUR 679 583 645 645

1000008 ANE/2009/227-820 EUR 465 422 442 442

1000073 ONG-ED/2006/131-727 EUR 233 - 198 198

1000103 DCI-MIGR/2010/253-414 EUR 778 517 739 739

1000116 DCI-NSAED/2010/239-285 EUR 1.000 956 976 976

1000146 DCI-FOOD/2010/242-563 EUR 1.136 693 1.136 1.037

1000158 FED/2011/231-870 EUR 1.195 1.075 1.163 1.148

1000199 EIDHR/2011/267-078 EUR 1.200 1.141 1.176 1.176

1000289 DCI-ENV / 2010 / 247-383 EUR 697 548 678 589

1000309 DCI-ASIA/2012/308-116 EUR 2.000 1.416 2.000 1.374

1000318 EIDHR/2012/308-591 EUR 300 286 294 294

1000320 DCI-FOOD/2012/301-117 EUR 1.489 1.339 1.433 1.425

1000358 DCI-MED/2013/323-584 EUR 1.350 934 1.350 929

1000389 DCI-ASIA/2013/312-235 EUR 1.000 223 - -

1000391 DCI-NSAPVD/2013/322-231 EUR 500 431 485 416

1000444 EIDHR/2014/348-263 EUR 709 611 709 462

1000525 EIDHR/2015/371-962 EUR 800 231 89 78

1000526 EIDHR/2015/371-627 EUR 450 184 184 83

1000597 LA/2016/378-659 EUR 800 252 - -

Delegation of the European Union Total 17.944 12.736 14.632 12.944

European Union Total

17.944 12.736 14.632 10.933

Foundations Arcus Foundation 1000390 Agri-Hub EUR 202 184 202 148

Arcus Foundation Total 202 184 202 148

Nationale Postcode Loterij (NPL) 1000251 120303 EUR 3.190 3.190 3.189 3.187

1000324 250302 EUR 1.350 1.350 480 480

1000412 Bijdrage 2013 EUR 1.350 1.350 334 334

1000418 Telephone Tree, Shelter me EUR 1.519 1.519 1.294 1.210

1000464 NPL bijdrage 2014 EUR 1.350 1.350 145 145

1000546 NPL 2015 EUR 1.350 1.350 195 1.295

Nationale Postcode Loterij (NPL) Total 10.109 10.109 5.638 6.652

Stichting DOEN 1000250 110307 EUR 695 695 685 685

Stichting DOEN Total 695 695 685 685

Stichting op Eigen Wieken 1000539 26-11-2015 EUR 240 60 - -

Stichting op Eigen Wieken Total 240 60 - -

Stop Aids Now! (SAN) 1000249 120229 EUR 500 500 498 498

1000329 20130494/IvE EUR 500 500 500 500

1000409 20140238/CVDV/BRF EUR 500 500 500 493

1000468 Stop Aids Now! EUR 500 500 403 335

1000603 Stop Aids Now EUR 407 407 - -

Stop Aids Now! (SAN) Total 2.407 2.407 1.901 1.826

Friends of Dhan 1000266 MoU 19.04.12 EUR 200 142 185 185

Friends of Dhan Total 200 142 185 185

Private Funding 1000454Private Funding 2013 HKF/CO2 comp

EUR 1.011 - 890 890

1000455 Private Funding 2013 EUR 1.336 - 640 387

Private Funding Total 2.347 - 1.531 1.277

SNV Netherlands Development Organisation 1000510 ref. Activity nr. 27179 EUR 388 - 83 -

SNV Netherlands Development Organisation Total 388 - 83 -

Foundations Total

16.587 13.597 10.224 10.772

12. OVERVIEW OF FUNDING FOR PROGRAMMES AND

PROJECTS FOR 2016 amounts x EUR 1,000 1)

Donor Group Donor Fund # Donor Reference #Currency Fund

Fund ReceivedCon-tracted

Spent (-)

Governments Department for International Development 1000227202351-102/ 41959/ 40050815

EUR 3.326 3.200 2.396 2.374

1000415Purchase Order no 40050815

EUR 2.404 1.658 2.404 2.358

Department for International Development Total 5.730 4.858 4.800 4.731

Ministry of Foreign Affairs The Netherlands 1000015 18384/DMW0109305 EUR 24.354 20.760 22.052 22.051

1000216 MRF2012-2015; act.no. 23512 EUR 1.995 1.397 1.984 1.973

1000217MRF 2012-2015; Act.no. 23511

EUR 1.500 1.465 1.479 1.479

1000293 Act.no. 24675 EUR 1.000 1.000 1.000 963

1000302 Activity no. 25002 EUR 1.298 1.261 1.261 1.261

1000331Act.nr. 24956; DSO/EM-070/13

EUR 5.947 5.947 5.947 5.923

1000340 Act.nr. 25247 EUR 248 248 248 248

1000341 Activity 25262 (DSH0116539) EUR 2.386 2.267 2.368 2.331

1000383 Act. nrs. 26010 EUR 20.150 16.357 17.783 14.407

1000422 2014-157970 EUR 5.000 3.700 4.904 4.061

1000451 Act. Nrs 26010 EUR 2.000 1.118 1.980 906

1000517 NL-1-PPR-27552 EUR 50.280 17.095 11.890 6.517

1000518 NL-1-PPR-28322 EUR 14.969 2.706 5.679 1.535

1000519 NL-1-PPR-28307 EUR 5.149 1.515 4.591 1.232

1000560 Act. no. 28769 EUR 2.000 500 549 415

1000575 NL-1-PPR-24956 EUR 1.543 1.219 1.543 1.384

1000584 Activity 28792 EUR 427 203 - -

1000598 Activity no. 29646 EUR 2.000 522 - -

Ministry of Foreign Affairs The Netherlands Total 142.245 79.279 85.259 66.687

Norwegian Ministry of Foreign Affairs 1000200 INS -11/0036 EUR 1.257 1.257 1.226 1.208

1000366 INS - 2159 EUR 594 581 594 572

1000441 INS-2159 EUR 363 352 335 306

1000570Energia QZA-0515 QZA-13/0375

EUR 383 383 178 50

Norwegian Ministry of Foreign Affairs Total 2.597 2.573 2.332 2.137

Royal Netherlands Embassies 1000026 ACT 19565 VS NR EUR 5.162 3.288 4.638 4.638

1000286 Activity no 24211 EUR 4.006 3.608 3.931 3.825

1000342RSB0115339. Activity no 24194

EUR 1.351 1.293 1.349 1.349

1000482 RSB0117890 / act.nr.26118 EUR 1.450 1.409 1.450 1.441

1000588 RSG0123412 EUR 2.400 800 - -

1000595 Activity 26118 EUR 250 250 150 171

Royal Netherlands Embassies Total 14.619 10.648 11.518 11.424

Swedish International Development Agency 1000297 54030364 EUR 3.520 3.309 3.381 3.375

1000378 DDP - SIDA EUR 1.021 981 985 1.020

1000386 E&E Programme EUR 5.043 4.839 4.738 4.450

1000531 202100-4789 EUR 2.848 1.561 1.485 671

1000538 contrib.nr. 61070070 EUR 1.552 319 375 322

1000540 61050199 EUR 1.750 1.750 1.750 742

Swedish International Development Agency Total 15.734 12.759 12.715 10.579

Swiss Agency for Development and Coorperation 1000367 7F-07289.01 EUR 1.145 1.145 1.145 1.130

1000439 Donor no. 7F-07289.01 EUR 537 537 537 506

Swiss Agency for Development and Coorperation Total

1.682 1.682 1.682 1.635

SECO-State Secretariat for Economic Affairs SECO 1000354 SSRC EUR 200 200 200 200

SECO-State Secretariat for Economic Affairs SECO Total

200 200 200 200

Ministry of Foreign Affairs Finland 1000514 DDP 2015-2017 EUR 300 300 300 286

Ministry of Foreign Affairs Finland Total 300 300 300 286

Governments Total

183.108 112.299 118.806 73.551

38 39

Donor Group Donor Fund # Donor Reference #Currency Fund

Fund ReceivedCon-tracted

Spent (-)

MFS Ministry of Foreign Affairs The Netherlands Div DSO/MO-28/2011 EUR 254.839 248.441 254.654 254.648

Ministry of Foreign Affairs The Netherlands Total 254.839 248.441 254.654 254.648

MFS Total 254.839 248.441 254.654 254.648

Other Agentschap NL (Senternovem) EUR 5.550 3.076 4.115 2.250 1.419

Agentschap NL (Senternovem) Total 5.550 3.076 4.115 2.250 1.419

Alliance 2015LA 1244 / ECU 1031-10

EUR 1.163 1.129 1.077 1.077 1.077

Alliance 2015 Total 1.163 1.129 1.077 1.077 1.077

MyClimateMyClimate GSVER NBP

EUR 720 456 - - 304

MyClimate Total 720 456 - - 274

Other 1000110 S2008.0005 EUR 588 405 304 304

1000193 LBSNN 2011-2015 EUR 2.340 2.340 2.169 2.169

1000228 REFUNDS 2010 EUR 1.602 1.412 317 314

1000262 120302 EUR 1.200 1.200 1.200 1.170

1000288 interest 2011 EUR 301 - 166 166

1000325 81158028 EUR 1.000 900 1.000 911

1000332Addendum to contract 20-06-2008

EUR 260 260 256 256

1000356 81162146 EUR 3.000 3.000 2.956 2.711

1000359 GS 751 EUR 520 - 491 491

1000375 Digital Defenders Partnership EUR 590 590 590 571

1000397 A-033394-05-506759 EUR 391 391 391 388

1000407 Cocoon/NEBE 2 EUR 393 385 385 385

1000421 UUHIP EUR 520 520 503 503

1000423 Pig Rearing Intervention EUR 795 491 752 482

1000448 GS 751 EUR 680 - 678 678

1000459 CFC/PD/2013/02/0041 EUR 1.100 550 514 480

1000471 81185436 EUR 3.640 77 3.604 62

1000496 W 08.270.314 EUR 300 180 255 45

1000505 101526220 EUR 240 216 140 140

1000524 SE4RC EUR 1.126 253 649 130

1000543 AD5000RHRN EUR 892 587 495 302

1000550 Donor Contract no 81182671 EUR 300 300 300 191

1000565VOICE 2016-2021 Oxfam Novib (Dutch Ministry)

EUR 4.816 140 1.161 156

1000572 Hivos Innovation Fund 2016 EUR 3.000 - 582 334

Other Total 29.594 14.197 19.858 13.342

Palladium International Pty Ltd 1000568 IG/HVS/0021 EUR 698 - 698 13

Palladium International Pty Ltd Total 698 - 698 13

Other Total 37.725 18.859 25.747 16.682

Grand Total 510.202 405.932 424.062 392.725

Foundations American Jewish World Service 1000100 Application nr 3377 USD 256 193 254 254

1000214 DAF29-122011 USD 1.315 1.315 1.315 1.315

1000585 Ref nr 6126/ FY2017-13 USD 250 250 - -

1000591 FY2017-14 USD 1.500 500 - -

American Jewish World Service Total 3.321 2.258 1.569 1.569

Arcus Foundation 1000157 1102-21 USD 200 200 194 194

1000388 1303-29 USD 250 250 249 245

1000500 G-PGM-1505-1275 USD 350 174 207 171

Arcus Foundation Total 800 623 651 610

Ford Foundation 1000098 1100-1047 USD 254 127 246 246

1000101 1110-0474 USD 239 208 234 234

1000211 1120-1598 USD 1.400 933 414 414

1000231 1110-0122 USD 600 600 441 441

1000357 0130-0614 USD 1.400 - - -

1000457 0140-1104 USD 1.000 - - -

1000494 #0155-1047 USD 200 200 177 157

Ford Foundation Total 5.092 2.068 1.512 1.493

Donor Group Donor Fund # Donor Reference #Currency Fund

Fund ReceivedCon-tracted

Spent (-)

Omidyar Network 1000107 ATTI USD 2.400 1.691 2.191 2.191

1000280 SEATTI USD 2.139 2.139 2.035 1.998

Omidyar Network Total 4.539 3.830 4.226 4.189

William and Flora Hewlett Foundation 1000381 #2013-9378 USD 450 450 450 448

1000490 #2015-2908 USD 300 300 290 289

1000512 Grant nr. #2015-3079 USD 8.000 6.500 6.500 6.500

1000516 #2015-2385 USD 355 355 355 355

William and Flora Hewlett Foundation Total 9.105 7.605 7.595 7.592

Foundations Total

22.857 16.384 15.553 15.453

Governments Department for International Development 1000160 KMP USD 305 291 290 290

1000192 200120-102/40049683 USD 3.022 2.827 2.702 2.702

1000206 PO 5731, 2011/S-36 059176 USD 7.060 6.276 6.250 6.224

1000346 PO 5731 USD 3.920 1.494 1.679 1.529

Department for International Development Total 14.307 10.888 10.921 10.745

Norwegian Ministry of Foreign Affairs 1000436 2073-TIM-13/0008 USD 667 531 645 407

1000484 ZIB-14/0028 USD 213 213 198 198

1000532 MWI-15/0008 USD 474 220 131 71

Norwegian Ministry of Foreign Affairs Total 1.354 964 975 676

Royal Netherlands Embassies 1000277 Activity 23921 USD 1.500 1.372 1.278 1.278

1000279Fondo Emancipación LAP0110874

USD 12.000 5.873 12.000 5.935

Royal Netherlands Embassies Total 13.500 7.245 13.278 7.212

Swedish International Development Agency 1000483 SIDA USD 3.842 2.501 3.280 1.570

Swedish International Development Agency Total 3.842 2.501 3.280 1.570

US Department of State 1000283 S-LMAQM-12-CA-1126 USD 1.250 1.250 1.250 1.250

1000363 S-LMQM-13-GR-1229 USD 962 1.239 924 924

1000492S-LMAQM-12-CA-1126-A003

USD 323 323 323 299

1000552 S-LMAQM-12-CA-1126 USD 500 500 412 352

US Department of State Total 3.036 3.312 2.909 2.825

Swiss Agency for Development and Coorperation 1000019 USD 1.845 743 1.571 1.571

1000223 7F-01069.02 USD 977 719 977 977

1000306 81014847 USD 9.400 - 9.238 9.238

Swiss Agency for Development and Coorperation Total

12.222 1.463 11.787 11.787

Governments Total

48.261 26.373 43.149 34.815

Other Global Fund 1000574 GUA-311-G06-H USD 2.418 1.037 2.370 996

1000580 BOL-H-HIVOS USD 8.216 3.191 6.911 610

1000581 GUA-311-G05-H USD 6.160 1.924 6.160 1.238

1000586 MEI-011-G01-H USD 1.416 260 1.074 98

Global Fund Total 18.210 6.412 16.515 2.942

Other 1000292 Space for Human Rights USD 1.876 1.876 1.859 1.859

1000361 OR2013-06976 USD 200 196 195 195

1000405Subgrant Award No 91015-S-001

USD 704 569 639 495

1000406 20140152 USD 1.835 1.806 1.806 1.786

1000480 HIVOS/20150209 USD 418 418 418 351

1000506 No. 2015/Grant/007 USD 1.855 - 1.648 312

1000528OGP Civil Society Coordination

USD 358 330 331 307

1000529Grant Number OR2015-24425

USD 245 189 245 141

1000544 No. 2015/Grant/018 USD 4.700 - 3.036 75

1000545 ATN/ME-15082-RG USD 2.642 222 1.701 315

1000583 Hivos/20160145 USD 973 305 973 34

Other Total 15.804 5.908 12.850 5.870

The Global Fund 1000299 GUA-311-G05-H USD 3.672 3.672 3.079 3.011

1000317 BOL-910-G09-H USD 14.491 14.491 14.491 14.491

1000380 MEI-011-G01-H USD 6.158 6.158 6.010 5.853

40 41

Donor Group Donor Fund # Donor Reference #Currency Fund

Fund ReceivedCon-tracted

Spent (-)

1000416 GUA-311-G05-H USD 14.694 14.184 14.661 14.302

1000473 CRI-H-HIVOS USD 4.883 2.674 4.210 1.481

1000493 BOL-910-G09-H USD 1.303 1.066 1.303 1.159

1000520 Grant name QPA-H-Hivos USD 11.465 4.255 11.158 3.012

1000522 QRA-H-HIVOS USD 4.330 2.054 3.853 951

1000551 CRI-Cfund-1601 USD 266 170 266 90

The Global Fund Total 61.263 48.724 59.031 44.349

Other Total 95.278 61.045 88.395 53.161

Grand Total 166.395 103.801 147.098 103.430

GBP-Contracts

Governments Department for International Development 1000345 PO 6071 GBP 26.414 16.466 25.076 17.099

1000548 Project Number 200824 GBP 3.252 852 3.117 590

Department for International Development Total 29.666 17.318 28.193 17.689

Governments Total

29.666 17.318 28.193 17.689

Other Other 1000555Comic Relief: Gender and generational empowerment with Vuasu

GBP 749 71 166 74

Other Total 749 71 166 74

Other Total 749 71 166 74

Grand Total 30.415 17.390 28.359 17.762

1) Please note this overview is not a complete overview of all Hivos funding. The following funds have been left out:

- In case there have been no changes in a fund in 2015 (funding, funds received, contracting and payments)

- In case the fund total was < €/$ 200,000

42 43

Political Parties Public Administration Women Leaders Women's CSOs General Public Civic Organisations Other Costs Total

Jordan € 2.184 € 55.718 € 70.000 € 4.883 € 40.247 € 0 € 0 € 173.032

Lebanon € 52.538 € 21.141 € 42.725 € 1.960 € 72.403 € 0 € 0 € 190.767

Malawi € 4.443 € 49.443 € 94.443 € 5.790 € 4.443 € 4.443 € 0 € 163.004

Zambia € 25.543 € 4.443 € 43.943 € 4.461 € 4.443 € 4.443 € 0 € 87.274

Zimbabwe € 44.443 € 4.443 € 54.443 € 44.461 € 4.443 € 3.783 € 0 € 156.015

Regional € 1.453 € 0 € 216.621 € 43.932 € 135 € 0 € 0 € 262.141

Progr Management € 0 € 0 € 0 € 0 € 0 € 0 € 495.932 € 495.932

Other costs € 0 € 0 € 0 € 0 € 0 € 0 € 6.591 € 6.591

Grand Total € 130.602 € 135.187 € 522.174 € 105.488 € 126.113 € 12.668 € 502.523 € 1.534.755

13. OVERVIEW OF WE4L EXPENDITURES 2016

44 45

14. FOUNDATION ONLY BALANCE

SHEET AS AT 31 DECEMBER 2016

15. EVENTS AFTER

BALANCE SHEET DATEFollowing the appropriation of result proposed by the board of directors, an amount of € 622,000 of the net result for 2016 will be added to the appropriated reserve for business operations. Of this amount, 500,000 will be added to the appropriated reserve for business/operations/calamities.

There have been no events after balance sheet date which have an impact on the annual accounts 2016.

46 47

16. FOUNDATION ONLY BALANCE

SHEET 2016 amounts x EUR 1,000 1)

31-12-2016 31-12-2015

ASSETS

Ref. 1

Intangible fixed assets

Software for business operations

Goodwill 182 270

Intangible fixed assets 1 3 185 0 270

Tangible fixed assets

Buildings for business operations 532

Furniture and fixtures for business operations 403 579

Cars for business operations 38 355

Buildings for objective 429 56

Tangible fixed assets 2 1.402 332 1.322

Financial fixed assets

Reserved cash 0 20.004

Certificates Triodos Bank 3.000 3.000

HTF Participations 38.218 28.670

Shares 281 0

Loans 19.912 0

Financial fixed assets 3 61.411 51.674

Claims, prepayments and accrued income

Claims for grants 4 64.804 58.040

Prepayments and accrued income 5 4.765 4.595

Claims, prepayments and accrued income 69.568 62.635

Cash at bank and in hand 6 51.070 37.887

Total 183.636 153.788

1) Itemised in Chapter 18: Notes to the Foundation only balance sheet as at 31 December 2016

After appropriation of the results

31-12-2016 31-12-2015

LIABILITIES

Ref. 1)

Reserves

Reserves

Appropriated reserve for business operations 4.063 2.841

Appropriated reserve for business operations - reorganisation 0 600

Appropriated reserve for business operations - programme development

0 500

Appropriated reserve for business operations - calamities 1.000 500

Appropriated reserve for programme management 1.466 2.859

Appropriated reserve for translation differences 300 198

7 6.829 7.498

Funds

Appropriated fund, Private Funds 4.384 3.134

Appropriated fund, Xandra Fund -20 20

Appropriated fund, Nat.Postcode Lottery 1.220 1.274

Appropriated fund, Stop Aids Now! 518 13

Appropriated fund, Refunds + Interest 4.220 3.741

Appropriated fund, Currency valuation 4.142 4.593

Appropriated funds related to The Innovation Station B.V. 450 0

Appropriated funds related to Hivos Impact Investments B.V. 343 0

Appropriated funds related to Hivos Food & Lifestyle Fund 132 0

Appropriated funds related to Hivos Mideast Creatives Fund 71 0

Appropriated fund, HTF participations 38.218 28.670

Appropriated funds for Programme Development & projects 20.000 0

Appropriated funds for Innovation 11.418 0

8 85.096 0 41.445

Reserves and funds 91.925 48.943

Long-term liabilities

General loan fund 0 84

Participation in North-South Plan 0 718

Guarantees issued 0 23.570

0 24.372

Long-term project liabilities 22.822 8.330

Long-term liabilities 9 22.822 32.702

Current liabilities

Current project liabilities 60.553 63.984

Accruals and deferred income 8.226 7.110

Reorganisation 110 1.049

Current liabilities 10 68.889 72.143

Total 183.636 153.788

1) Itemised in Chapter 18: Notes to the Foundation only balance sheet as at 31 December 2016

48 49

Actual 2016 Budget 2016 Actual 2015 Budget 2017

INCOME Ref. 1)

Income from private individuals

Donations and gifts 1.555 2.474 620 2.580

Legacies 763 104

Climate fund CO2 compensation 7 1

Income from private individuals B 2.325 2.474 724 2.580

Income from companies 1.425 2.917 1.014

Income from lottery organisations 1.350 1.350 1.451

Income from government subsidies 79.028 70.918 47.458 80.630

of which MFS-2 grant of Alliance partners 242 3765

Income from other non-profit organisations 10.962 9.357

Other income

Income from investments

Dividend HTF participations 1.332 863 934 1.000

Net investment / unrealized exchange gains HTF participations

9.548 3.441

Revaluation BV's -1.029 0

Revaluation HTF Loan Agreement 2016-2020 22.398 0

Exchange risk gain/loss revaluation Balance Sheet -451 3.113

Interest minus bank costs 8 187

Exchange gain/loss of Operations -195 -103

Other income 990 324 63

Other income 32.602 23 7.895 1.063

Total income D 127.692 76.332 67.798 85.724

1) Itemised in Chapter 7+8: Notes to the Consolidated Statement of income and expense

EXPENSE

Spent on objectives/Programmes (new commitments)

Open Freedom of Expression Ref. 2) 2.885 68.775 37.769 74.289

Sexual Rights and Diversity 31.619

Transparency & Accountability 19.786

Actual 2016 Budget 2016 Actual 2015 Budget 2017

Women's Empowerment 14.642

Green Sustainable Food 6.518 18.909

Renewable Energy 15.937

MFS-2 programmes of Alliance partners 242 3.765

Total expenditure on objectives C 91.560 68.775 60.443 74.289

Costs spent on objective as a % of total income (= C / D) 71,7% 90,1% 89,2% 86,7%

Costs spent on objective as a % of total costs (= C / F) 95,2% 85,6% 93,5% 85,5%

Spent on generating income

Costs of direct fundraising A 306 280 305 536

Direct fundraising: costs as a % of income (= A / B) 13,2% 11,3% 20,8% 20,8%

Income from companies 24 520 235

Income from lottery organisations 22

Income from government subsidies 1.308

Income from other non-profit organisations 181

Other income 13 1.473 1.532 2.706

Total costs of generating income 1.854 2.273 2.072 3.242

Management and accounting costs E 2.809 9.294 2.123 9.338

Man. and accounting costs as a % of total income (= E / F) 2,9% 11,6% 3,3% 10,7%

Total costs F 96.223 80.342 64.639 86.869

Operating Result 31.469 -4.011 3.160 -1.145

Exchange risk Regional Office budget

Extraordinary expense 0 0 0 0

Results before appropriation 31.469 -4.011 3.160 -1.145

Added to/withdrawn from:

- Appropriated reserve for programme management 1.393 4.221

- Appropriated reserve for translation differences -103 -281

- Appropriated reserve for business operations -548 -113

- Appropriated funds for Programmes -1.664 3.000 -3.265 -800

- Appropriated fund for HTF participations -9.548 -3.441

- Appropriated fund for Programme Development & projects/Innovation

-21.406 3.000 0 2.892

- Appropriated fund for Hivos BV's 1.029 0 0

Total addition/withdrawal -30.847 6.000 -2.878 2.092

Results after appropriation 622 1.990 282 947

1) Itemised in Chapter 7: Notes to the Consolidated Statement of income and expense and Chapter 19: Notes to the foundation only

allocation of expense2) Spent on objectives in 2015 has been devided in the following way:

17. FOUNDATION ONLY STATEMENT OF INCOME AND EXPENSE 2016

Actual 2016 Budget 2016 Actual 2015 Budget 2017

Open Green

Green Entrepreneurship 18.320 18.320

Rights & Citizenship 16.195 16.195

Expression & Engagement 20.395 20.395

Action for Change 1.768 1.179 589

37.769 18.909

amounts x EUR 1,000 1)

50 51

18. NOTES TO THE FOUNDATION ONLY BALANCE SHEET AS AT

31 DECEMBER 2016

ASSETS

1. Intangible fixed assetsSee notes to the consolidated Balance Sheet

2. Tangible fixed assetsSee notes to the consolidated Balance Sheet

3. Financial fixed assets- Reserved cashSee notes to the consolidated Balance Sheet

- Certificates Triodos Bank/Other ParticipationsSee notes to the consolidated Balance Sheet

- HTF ParticipationsSee notes to the consolidated Balance Sheet

- Shares

- Hivos is the only shareholder in Hivos Impact Investment B.V., a for-profit social venture that manages impact investment funds that are aligned with the programmes of Hivos Foundation.

- Hivos is the only shareholder in Mid East Creatives Fund B.V. The aim of Mid East Creatives Fund is to offer financial support to start-ups in the creative sector in the MENA region, with a social impact.

- Hivos is the only shareholder in Food & Lifestyle Fund B.V. The aim of Food & Lifestyle Fund is to offer financial support to start-ups in the food sector, with a social impact

- LoansInterest % Duration 31-12-2015 Added Withdrawn 31-12-2016

Hivos Triodos Fund Subordinated Loan 3% interest-only 0 10.013 8.000 2.013

Hivos Triodos Fund Subordinated Loan (A) 0%                 0 4.500 0 4.500

Hivos Triodos Fund Subordinated Loan (B) 0% interest-only 0 12.684 0 12.684

Hivos Impact Investments B.V. 3% interest-only 0 265 0 265

The Innovation Station BV (loan 1) 0% 5 years 0 300 0 300

The Innovation Station BV (loan 2) 5% 5 years 0 150 0 150

0 19.912

4. Claims for grantsSee notes to the consolidated Balance sheet

Ownership % 31-12-2015 Ownership % 31-12-2016

Hivos Impact Investments B.V. 100% 0 100% 78

Hivos Food & Lifestyle Fund B.V. 100% 0 100% 132

Hivos Mideast Creatives Fund B.V. 100% 0 100% 71

0 281

ASSETS

5. Prepayments and accrued incomePrepayments and accrued income as at 31 December can be broken down as follows:All items have a remaining term of less than one year

2015 2016

Debtors not including grants 2.524 3.615

Current account between head office/regional offices 627 59

Prepayments (employees/travelling) 169 173

Project prepayments 883 0

Receivable (and prepaid) 384 918

Other 7 0

4.595 4.765

The fair value of the receivables approximates the book value, due to their short-term character.

6. Cash at bank and in handCash at bank and in hand is at the Foundation’s disposal.Cash at bank and in hand can be broken down as follows:

31-12-2015 31-12-2016

In hand 6 4

Bank 37.881 51.066

37.887 51.070

LIABILITIES

7. ReservesSee notes to the consolidated Balance Sheet

8. FundsSee notes to the consolidated Balance Sheet

9. Long-term liabilitiesSee notes to the consolidated Balance Sheet

10.Current liabilitiesHivos’s current liabilities comprise project liabilities payable within 1 year plus other liabilities.

Accruals and deferred income as at 31 December can be broken down as follows:

2015 2016

Project payments 63.984 60.553

Creditors - Hivos - General loan fund/North-South Plan

1.3250

1.662802

Open amounts related to salaries 90 18

Outstanding costs 1.647 1.782

Outstanding project payments (other) 1.689 2.235

Payments in transfer 961 53

Payable taxes 1.206 1.326

Other 192 349

Reorganisation Provision 1.049 110

72.143 68.889

amounts x EUR 1,000 1)

52 53

19. NOTES TO THE FOUNDATION ONLY

ALLOCATION OF EXPENSE 2016

Appropriation Objective Total 2016 Budget 2016 Total 2015

Open Green

Expense Freedom of Expression

Sexual Rights and Diversity

Transparency & Account-ability

Women’s Empower-ment

Sustainable Food

Renewable Energy

MFS2 alliantie partners

Totalobjective

Totalincomeraised

Totalmngt. &account.

Grants and contributions 2.326 25.485 15.947 11.802 5.254 12.790 242 73.846 73.846 56.054 45.098

Publ. and communication 27 301 188 139 62 151 0 868 224 157 1.249 894 720

Employee costs 447 4.894 3.062 2.266 1.009 2.456 0 14.134 1.368 2.225 17.727 19.509 15.696

Costs of housing 13 143 90 66 29 72 0 413 40 65 518 692 557

Office and general expenses 64 704 441 326 145 353 0 2.033 196 320 2.549 2.499 2.011

Amortisation, depreciation and interest 8 92 58 43 19 46 0 266 26 42 334 694 558

Operating costs 559 6.134 3.839 2.840 1.264 3.078 0 17.714 1.854 2.809 22.377 24.288 19.541

Totals 2.885 31.619 19.786 14.642 6.518 15.868 242 91.560 1.854 2.809 96.223 80.342 64.639

Employee costs: 2016 2015

The breakdown of the employee costs for 2016 are:

Salaries 13.934 10.839

Social Security 1.169 1.739

Pension 867 1.150

Temporary employees 866 628

Other employee costs 890 1.339

Total 17.727 15.696

Total contracted employees:

The average contracted employees during year 2016 was:

Hivos Global Office 137 139

Hivos Regional Offices 247 202

Total 384 341

Independent auditor costs:

The breakdown of the independent auditor costs for 2016 are:

Annual accounts 321 203

Ministry Foreign Affairs MFS II subsidy 24 10

Project audits 29 21

Fiscal advice 12 3

Total 386 237

amounts x EUR 1,000 1)

54 55

20. INDEPENDENT

AUDITOR’S REPORT

56 57

58 59