Financial Statements
International Tropical Timber Organization
December 31, 2015 and 2014

International Tropical Timber Organization
Financial Statements

December 31, 2015 and 2014

Contents
Report of Independent Auditors ............................................................................................. 1
Balance Sheets ........................................................................................................................ 2
Statements of Revenues and Expenditures ............................................................................. 3
Statements of Changes in Fund Balance ................................................................................ 4
Statement of Cash Flows ........................................................................................................ 5
Notes to Financial Statements ................................................................................................ 6

International Tropical Timber Organization
Balance Sheets
December 31,
2015
2014
(U.S. dollars)
AssetsCash and time deposits
Net Investments in securities$20,018,577-$23,454,660
12,200,000

Investments in securities
Less: Provision for Impairment of Investment in securities

12,014,000(12,014,000)

12,200,000-

Arrears in voluntary contributions
Accounts receivable from Japan
Prepaid expenses
Advances to and receivable from staff members and others
Accrued revenue

35,658339,840316$ 20,394,391

2,105,391
284,11239,336
320,109438,332$ 38,841,939

Liabilities and contributions
Accounts payable to staff members and others
Accounts payable to JapanAccrued liabilities
Liabilities arising from Exchange of Notes
Membership contributions received in advance
Unappropriated fundReserve for programme support
Members’ funds
Administrative Account:
Special reserve
Reserve provided by interest income
Surplus of revenues over expenditures
Project accounts:
Appropriated for specified projects, pre-projects andactivities
Unappropriated funds
Surplus from completed projects, pre-projects andactivities
Impairment of Investments in securities
Provision for Impairment of Investment in securities
Arrears in assessed contributions
Allowance for arrears$

10,089122,423
397,8123,419,632
46,7052,436,238
1,337,230
7,770,130$ 21,755
96,679572,515
4,241,912
176,2722,498,885
1,543,317
9,151,335

1,500,000
2,009,132
12,494,981

1,500,000
2,078,016
10,396,840

16,160,443

29,886,585

2,306,874(5,137,477)

2,324,698(5,967,546)(12,014,000)
18,814,583(6,215,042)
24,72012,624,261$ 20,394,391

2,315,257(5,967,546)
35,071,675(5,405,793)
24,72029,690,602$ 38,841,939

The accompanying notes are an integral part of these financial statements.
2

International Tropical Timber Organization
Statements of Revenues and Expenditures

Year ended December 31,
2015
2014
(U.S. dollars)
Revenues:
Contributions from member countries
Reimbursement by Japan
Voluntary contributions
Rectification
Pledges not received
Interest income
Dividends
Other income
Expenditures and others:
Administrative accounts:
Salaries and benefits
Official travel
Social security
Special activities
Data processing
Other costs
Council meetings
Communication and OutreachExpert meetings
Statistics, Studies and Information
Annual Report and Biennial review
Write-off of arrears in contributions
Exchange loss
Time delay (Reversal) in settling advance payments
Gain and Loss on securities
Allowance expense for arrears
Increase in Provision for Impairment of Investment insecurities
Project accounts:
Project cost
Excess of revenues over expenditures(Excess of expenditures over revenues)$

7,952,059
260,077
4,825,627
403,663
2,012
13,443,437$ 7,322,796
772,803
11,181,747(864,420)(32,302)952,895
64,84734,746
19,433,111

3,467,839
86,515710,284
37,470122,156
244,892
201,123
428,675
100,003251,157
30,000330,000
37,340(122,627)-

3,695,896
122,895
725,51432,01586,628205,545693,228
428,054
129,376
283,034
30,28655,755124,570(46,368)
81,592-

12,014,000
17,938,829

6,648,020

11,426,172
29,365,000$ (15,921,563)

11,126,761
17,774,781$ 1,658,331

The accompanying notes are an integral part of these financial statements.

3

International Tropical Timber Organization
Statements of Changes in Fund Balance
For the years ended December 31

2014
Members’ funds as of January 1, 2014
Excess of revenues over expenditures
Surplus from Completed projects
Utilization of remaining funds by donors
Utilization of members fund provided by interest income for consultant
feeAdjustment of prior year
Transfer to Special Account from Administrative AccountTransfer to Special Account from Bali Partnership Fund AccountTransfer to Special Account from Executing Agencies AccountTransfer to Bali Partnership Fund Account from
Executing Agencies AccountMembers’ funds as of December 31, 2014
2015
Excess of revenues over expenditures
Surplus from Completed projects
Utilization of remaining funds by donors
Utilization of members fund provided by interest income for consultant
feeAdjustment of prior year
Transfer to Special Account from Administrative AccountTransfer to Special Account from Bali Partnership Fund AccountTransfer to Special Account from Executing Agencies AccountTransfer to Bali Partnership Fund Account from
Executing Agencies AccountMembers’ funds as of December 31, 2015

Bali
SpecialPartnership
Account
Fund Account(U.S. dollars)

Executing
Agencies
Account

Total

Administrative
Account$34,196,396
1,553,869
104,461(618,770)$12,753,498
1,438,556––$ 2,948,971
34,95396,441(618,770)$1,081,179
112,906
8,020–$17,412,748
32,454––(60,062)(104,220)–––(60,062)(92,136)(65,000)–––(12,084)–
348,767
405,082–––(348,767)
–

–
–
–
–
(405,082)–$35,071,675–$13,974,857–$ 3,203,360

356,793$ 1,210,131(356,793)$16,683,328(15,931,004)
9,441(150,000)

2,564,787––(5,698,431)
7,695(150,000)(433,359)
1,746–(12,014,000)––(350,000)––(69,729)(115,801)–––(69,729)(115,801)(350,000)
–
–

–
–
–
150,000
5,715,529–––(150,000)
–

–
–
–
–
(5,715,529)––
350,000–––$ 18,814,583–$ 16,004,115–$ 3,228,152

648,884$ 1,277,402(648,884)$ (1,695,084)

Elimination$–(65,000)––––
65,000
–
–

$

$

–
–

–
–

The accompanying notes are an integral part of these financial statements.
4International Tropical Timber Organization
Statements of Cash Flows

Year ended December 31,
2015
2014
(U.S. dollars)
Excess of revenues over expenditures$ (15,921,563)$

1,658,331

Changes in assets and liabilities:
Arrears in voluntary contributions
Arrears in assessed contributions
Investments in securities
Impairment of Investment in securities
Accounts receivable from Japan
Prepaid expenses
Advances to and receivable from staff and others
Accrued revenue
Liabilities arising from Exchange of Notes
Allowance for arrears
Accounts payable to staff members and others
Accounts payable to JapanAccrued liabilities
Membership contributions received in advance
Unappropriated fundReserve for programme support

2,105,391(809,249)
186,000
12,014,000
284,112
3,678(19,731)438,016(822,280)(11,666)
25,744(174,703)(129,567)(62,647)(206,087)(284,112)(38,297)(134,487)(214,118)(487,279)(31,575)(8,474)
316,687
44,078(1,561,001)
348,993

Changes in members’ funds:
Adjustment of prior year
Cash disbursement as Decision 2 (XXXIV)
Utilization of remaining funds by donors
Net increase / (Net decrease) in cash

(115,801)(69,729)(150,000)(3,436,083)(104,220)(60,062)(618,770)
3,592,738

Cash and time deposits at beginning of year
Cash and time deposits at end of year

23,454,660$ 20,018,577

19,861,922$23,454,660

3,046,010
1,018,973
702,060

The accompanying notes are an integral part of these statements.

5

International Tropical Timber Organization
Notes to Financial Statements

1.

Organization and Business

The International Tropical Timber Organization (ITTO) was established pursuant to theInternational Tropical Timber Agreement, 1983, with its headquarters in Yokohama, Japan,
and continues to operate from this location. The Agreement was succeeded by theInternational Tropical Timber Agreement, 1994 and 2006 (“the Agreement”).
The objectives of the Organization are laid down in Article 1 of the Agreement and include
the provision of a consultative forum for producing and consuming members on all aspects of
the world timber economy; promotion of the expansion, diversification, and structural
improvement of the international tropical timber trade together with more transparency andbetter distribution; the encouragement of reforestation and other forest management activities;
promotion of further processing of tropical timber in the producing countries, with researchand development as well as technology transfer to support both of these goals; and support fordevelopment of national policies in sustainable utilization and conservation of tropical forests,
with special regard for ecological balance and genetic resources.
The accounts of ITTO consist of the Administrative Account, the Special Account, the Bali
Partnership Fund Account, the Executing Agencies Account and Other Accounts which theInternational Tropical Timber Council (ITTC) shall deem appropriate and necessary. As of
December 31, 2015, only the first four accounts have been established. The Executing
Agencies Account was established in 2003. In addition, as of December 31, 2015, four
sub-accounts have been established under the Special Account and two sub-accounts underthe Bali Partnership Fund Account, namely: (1) the Project Sub-Account, (2) the Pre-Project
Sub-Account, (3) the Thematic Programmes Sub-Account and (4) the Japan Trust Fund under
the Special Account, and the Sub-Account “A” and the Sub-Account “B” under the Bali
Partnership Fund Account. All inter-account balance and transaction are eliminated in the
consolidated financial statements of ITTO.
Administrative AccountContributions to the Administrative Account are payable in freely usable currencies inaccordance with the provisions of Article 22 of the Agreement.
The Government of Japan provides suitable premises, with furniture, fittings, and otherequipment, as well as conference facilities gratis for the use of ITTO, and supplies allnecessary gas, electricity, water, fire protection, and other utilities gratis for the ITTO
headquarters. The value of such items provided is not recorded in the accompanying financial
statements.

6

International Tropical Timber Organization
Notes to Financial Statements (continued)

1.

Organization and Business (continued)

Special Account
The possible sources of finance for the Special Account are:(a) The Common Fund for Commodities (CFC);(b) Regional and international financial institutions; and(c) Voluntary contributions.
The resources of the Special Account are used only for approved projects or for pre-project
activities. All expenditures under the Pre-Project Sub-Account are reimbursed from theProject Sub-Account if projects emanated from those pre-projects are subsequently approved
and funded. All receipts pertaining to specific identifiable projects are brought into the Special
Account. All expenditures incurred on such projects are charged to the Special Account.
ITTC shall, by special vote, establish terms and conditions on which it would, when andwhere appropriate, sponsor projects for loan financing, where a member or members havevoluntarily assumed full obligations and responsibilities for such loans. ITTO shall have no
obligations for such loans.
Contributions for specified approved projects are used only for the projects for which they
were originally intended, unless otherwise decided by ITTC in agreement with the contributor.
In case ITTC decides to terminate a project, ITTO shall return to each contributor for specificprojects the balance of any funds remaining pro rata to each contributor’s share in the total of
the contributions originally made available for financing that project, unless otherwise agreed
to by the contributor.
Financial contributions to the Special Account are payable in freely usable currencies and are
exempt from foreign-exchange restrictions. ITTC may decide to accept other forms ofcontributions to the Special Account, including scientific and technical equipment or
personnel, to meet the requirements of approved projects.
Actions/activities, pre-projects and projects are funded from the resources of both the Special
Account and the Bali Partnership Fund Account (co-financed projects) in accordance withapproval by ITTC.

7

International Tropical Timber Organization
Notes to Financial Statements (continued)

1.

Organization and Business (continued)

The Thematic Programmes Sub-Account
The ITTA, 2006, included the creation of the Thematic Programmes Sub-Account (article
20, paragraph 1(a)). The Council, at its Forty-fourth Session in November 2008, adopted thefollowing three Decisions:•

Decision 8 (XLIV) The Thematic Programmes Sub-Account under the Special Account;•

Decision 9 (XLIV) on Thematic Programmes on Pilot Basis, and Operational Procedures
and Guidelines; and•Decision 10 (XLIV) Thematic Programme Profiles for the following thematic areas:a.

Forest Law Enforcement, Governance and Trade (TFLET);b.

Reducing Deforestation and Forest Degradation and Enhancing Environmental
Services in Tropical Forests (REDDES);c.

Community Forest Management and Enterprises (CFME);d.

Trade and Market Transparency (TMT); ande.

Industry Development and Efficiency (IDE).

The Council, through Decision 8 (XLIV) decided to:(1) Establish, with effect from January 1, 2009, the Thematic Programmes Sub-Account in
the Special Account of the International Tropical Timber Organization for thedevelopment, management, implementation and evaluation of Thematic Programmes;(2) Authorize the Executive Director to transfer into the Thematic Programmes Sub-Accountunearmarked contributions for the financing of specific Thematic Programmes,
consistent with the procedures for Thematic Programmes established on a pilot basis by
the Council;(3) Request the Executive Director to submit to the Council an auditor’s report on the
Thematic Programmes Sub-Account of the Special Account as soon as possible after theclose of the financial year but not later than six months after that date and in any case notlater than two months before the next session of the Council; and(4) Apply mutatis mutandis the Financial Rules of the International Tropical Timber
Organization to the Thematic Programmes Sub-Account.
The purpose of the Thematic Programmes Sub-Account shall be to facilitate unearmarked
contributions for the financing of approved pre-projects, projects and activities consistent with
Thematic Programmes established by the Council. The donors may allocate theircontributions to specific Thematic Programmes or may request the Executive Director to
make proposals for allocating their contributions. (Article 20, paragraphs 4 and 5, ITTA,
2006).

8

International Tropical Timber Organization
Notes to Financial Statements (continued)

1.

Organization and Business (continued)

Thematic Programmes Sub-Account (continued)
In accordance with the Decision 9 (XLIV) on the Operational Procedures and Guidelines, theExecutive Director will be responsible for the implementation of the thematic programmes
including the assessment and selection of proposals for financing under the Thematic
Programme. The Members and the Executive Director will develop and submit proposals forfinancing under the Thematic Programme. Each thematic programme will have a Thematic
Programme Advisory Committee to assist the Executive Director with the implementation of
the thematic programme.
Japan Trust Fund in the Special AccountPursuant to an Agreement between ITTO and Government of Japan, the Japan Trust Fund wasestablished on December 9, 1993 as a separate Sub-Account of the Special Account. The
resources of this fund consist of:(a) Interest accrued on investment of the unliquidated voluntary contribution from Japan to
the Special Account as follows:– All interest up to December 31, 1993
– A percentage agreed to between the Executive Director and Japan, but not exceeding
50 per cent of interest with effect from January 1, 1994. (Actual percentage for eachof twenty two years ended December 31, 2015, was 50 percent.)(b) All interest earned from investment of funds from this Trust Fund.
This fund is used for:(a) Supplementary assistance approved by the ITTC to meet increased project cost for
projects which were originally financed fully or partially by Japan.
(b) Meeting costs related to assistance to ITTO agreed by Japan and the Executive Director.
(c) Assistance to meet ad hoc expenditures for liaison activities between the Host Country(Japan) and the ITTO.
In December 2002, in accordance with instructions from Government of Japan an amount of$15,000,000, accumulated surplus recorded in prior years in the Japan Trust Fund wastransferred into the unappropriated fund (liability) in the Bali Partnership Fund: Sub-AccountA, for subsequent financing by Japan of projects and pre-projects under the Bali Partnership
Fund: Sub-Account A. These funds were fully allocated as of December 31, 2007, and as suchthe balance is nil as at December 31, 2015.

9International Tropical Timber Organization
Notes to Financial Statements (continued)

1.

Organization and Business (continued)

Bali Partnership Fund AccountPursuant to Article 18.1. (C) and Article 21 of the Agreement, the Bali Partnership Fund wasestablished in 1999. The Fund is used for enhancing the capacity of members to implement a
strategy for achieving exports of tropical timber and timber products from sustainably
managed sources. Resources of the Fund shall be allocated by the ITTC only for Projects,
Pre-Projects and Activities for the purpose set out in the Agreement and approved by the
ITTC. Rule 15.3 of the Financial Rules and Rules Relating to Projects of ITTO adopted by
ITTC through Decision 6 (XXIII) of December 6, 1997 (“the Financial Rules”), stipulates thatno resources shall be transferred from the Special Account to the Bali Partnership Fund
without a decision by ITTC and the consent of the original financial contributor. The activities
began to take place in this Fund in 1999.
The possible sources of finance for the Bali Partnership Fund are:(a) Voluntary contribution from members;(b) Fifty per cent of interest earned as result of activities related to the Special Account;(c) Voluntary contribution from other public and private sources; and(d) Interest earned in the Bali Partnership Fund from all deposits to that Fund.
In allocating resources of the Fund, the Council shall take into account:(a) The special needs of members whose forestry sectors’ contribution to their economies isadversely affected by the implementation of the strategy for achieving the exports oftropical timber and timber products from sustainably managed sources by the year 2000;
and(b) The needs of members with significant forest areas who establish conservation
programmes in timber producing forests.
Operational rules of the Bali Partnership Fund Account are the same as those of the Special
Account. The Bali partnership Fund Account has two sub-accounts, the Sub-Account “A” forcountry-specific and the Sub-Account “B” for non-country-specific relating toactions/activities, pre-projects and projects designed to directly assist tropical timber
producing members to achieve the objective of the Fund.

10

International Tropical Timber Organization
Notes to Financial Statements (continued)

1.

Organization and Business (continued)

Executing Agencies Account
The ITTC at its Thirty-fifth Session held during November 3 – 8, 2003, through Decision 3(XXXV), decided to establish the Executing Agencies Account with effect from the year
ended December 31, 2003, in order to exclude the funds committed from the cash and time
deposits of the Special Account and the Bali Partnership Fund Account at the end of eachfiscal year.
The source of finance for the Executing Agencies Account are mainly the funds committed forspecified Projects, Pre-Projects and Activities which are not yet disbursed to the respective
Executing Agencies, and are to be disbursed in the future years in accordance with Projects
Agreements between ITTO and the respective Executing Agencies.
The Decision 3 (XXXV) also authorized the transfer of fifty per cent interest earned on the
Executing Agencies Account into the “unearmarked funds” in the Special Account, and theremaining balance of interest earned into the Bali Partnership Fund Account.

2.

Significant Accounting Policies(1) Basis of preparation of accompanying financial statements
The accounting of ITTO is performed in accordance with provisions of the ITTA and the“Financial Rules and Rules Relating to Project of ITTO”. The accounts are maintained in
U.S. dollars. Japanese yen transactions are translated into U.S. dollars monthly at therates of exchange as determined and supplied by the United Nations. Foreign currency
exchange gains and losses on conversion are included in the revenues and expenditures
account. The accounts have been prepared primarily on an accrual basis.
(2) Investments in Securities
Financial asset is classified as Investments in Security if;1) the financial assets are designated upon initial recognition when a group of financial
assets is managed and its performance is evaluated on a fair value basis, in accordancewith a documented risk management or investment strategy, and information about thegroup is provided internally on that basis to the organization’s key management
personnel. Investments in Securities are stated at fair values, with any gains or losses
arising on measurement recognized in surplus or deficit. Fair value was measured basedon those derived from inputs that are observable for the asset, either directly or indirectly.
2) the financial assets are the investments for which the organization has the positive
intent and ability to hold to maturity. These investments are measured at amortized costusing the effective interest method less any impairment, with revenue recognized on an
effective yield basis.
11

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)
3) Provision for Impairment of Investment in securities
USD 12,014,000 of the provision was provided on the balance of the investment in
Ardent Fund. On 26th April, 2016, Blackstar Capital Star Limited, the solo owner ofArdent Harmony Inc. presented a petition of voluntary liquidation to the Grand Court of
the Cayman Island and the court issued a supervision order that the liquidation ofArdent Harmony Inc be continued.
The management received an official report from the liquidator dated on 20th June,
2016. Based on the content regarding the residual assets, the management estimatedcollectible amount from the investment, which includes a claim for a legal cost against
ITTO injunction.

(3) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks andother short-term highly liquid investments with original maturities of three months or
less.

Administrative Account(4) Fixed assets
Fixed asset additions are written off in the year of acquisition.
(5) Special reserve
A contingency reserve was established to set aside funds to meet obligations towards thestaff members of the Organization arising in the event that the ITTO ceases to exist suchas termination indemnities, repatriation travel and removal costs, and repatriation grants.
The International Tropical Timber Council (ITTC) decided in its Resolution 1 (VIII) at
its Eighth Session that the “contingency reserve” be a “Special Reserve Fund” to be
utilized only as determined by the ITTC.
(6) Allowance for arrears
A provision for impairment of arrears is established when there is objective evidence that
ITTO will not be able to collect all amounts due according to the original terms of thearrears. The length of outstanding period of the arrears and the status of the membershipare considered indicators that the arrear is impaired. The change in the amount of theprovision is expensed and included in Allowance expense for arrears on Statements of
Revenues and Expenditures.

12

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Administrative Account(continued)(7) Reserve provided by interest income
Based on the Financial Rules of ITTO (Rule 5.5), interest income is set aside as a reserve
which constitutes a resource of the administrative budget for the next year throughapproval of the ITTC. Under Decision 2 (XXXIV) adopted at the Thirty-fourth Sessionin May 2003, the ITTC authorized the Executive Director to use the interest earned in the
Administrative Account to hire on a temporary and intermittent basis, consultants andcontractors to support the Secretariat in carrying out its duties. Therefore, for the
Administrative Budget for the financial year 2003 onward, interest income is set aside in
a separate heading to be utilized for these authorized purposes.
(8) Provident Fund
Until December 31, 2001, all staff members, except nationals of or permanent residents
of Japan, participated in a provident fund as their pension plan. Contributions to theprovident fund which are payable monthly include: (a) an amount equivalent to 7.25
percent of pensionable remuneration to be paid by the staff members and deducted fromtheir salary; and (b) an amount twice of the staff members’ contribution (14.50 percent)payable by the Organization. The ITTC, at its Forty-fourth Session held in November
2008, authorized the amendments to be made to the ITTO Staff Regulations and Rules;
and accordingly amended the contributions to the Provident Fund by both the staff
members and by the Organization to be “at the percentage rates set by the United Nations
Joint Staff Pension Fund (UNJSPF)”. The current percentages applied from November
2008 are: (a) 7.90% to be paid by the staff members, and (b) 15.80% payable by theOrganization. Beginning from January 1, 2002, the ITTC authorized the Executive
Director to implement a uniform system with regard to the contribution of theOrganization to the Provident Fund for all staff members. Under this system, and forstaff members who are nationals of or permanent residents of Japan, their contributions
to the provident fund are the contribution payable by the Organization less the amountpayable (by employer) to the Japanese national scheme. These staff members do notcontribute to the provident fund as their salary are already deducted for the
self-contribution to the Japanese national scheme.
ITTO entered into an agreement in December 1987 with an insurance company named
Assicurazioni Generali S.p.A. for the management of the Organization’s provident fundon behalf of its staff members with the firm “Generali Worldwide Insurance Company
Limited”, Guernsey, Channel Islands, United Kingdom. Subsequently, in April 2002, theagreement with the company was revised, mainly with a view to expand the scope of theprovident fund through the inclusion of the option of ITTO US Equity Own Fund, in
addition to the USD Deposit Administration Fund (USD Bond).

13

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Administrative Account (continued)(9) Contribution Discounts
Based on the Rule 4.3 of the Financial Rules, and member who has paid its fullcontribution within four months after the due date, the first day of each financial year
(Article 19.6 of the Agreement), shall receive a discount at a rate to be determined fromtime to time by the ITTC. The contribution discount for each year is recognized in thefollowing year as a reduction of the following year’s assessed contribution amount. The
discount provided during 2013 which are recognized in 2014 totaled $240,395. There
was no discount provided during 2014.
Special Accounts and Bali Partnership Fund Account(10) Recognition of contributions
A voluntary contribution is recognized when a project is approved and financing isauthorized by the ITTC. However, effective from 2002, voluntary contributionscommitted to be paid on installment basis are recognized on cash receipt basis.
Contributions received before project approval are recorded as unappropriated funds inthe liabilities.
(11) Appropriation for specified projects
The outstanding balance of commitments for specified projects and pre-projects at
year-end is appropriated for specified projects. When the actual expenditure is made, theappropriated surplus is reversed to the unappropriated surplus.
(12) Surplus from completed projects
The balance returned from the executing agency for projects is appropriated for surplus
from completed projects with obligation of refund to donors.

14International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Special Accounts and Bali Partnership Fund Account (continued)(13) Reserve for programme support
Based on ITTC Decisions 5 (XI), 5 (XII), and 4 (XV), the costs of administering new
projects and pre-projects may be deducted with the first disbursement of expenditure.
These include the expenses of telecommunications, bank charges, costs of financial
control and document translation costs. The rates deducted from the total projects
budgets increased from 5.5% to 6% (not exceeding 11% in the case of ITTO-executed
projects and pre-projects from 10.5%) through Decision 2 (XXX) held in June 2001 andeffective thereafter. Such administrative costs are to be co-mingled for general use of all
projects under the heading “Programme Support”. The ITTC at its 34th Session held in
November 2003 approved the increase of the above rates (from 6% to 8% and from 11%
to 13%), which are adopted for projects, pre-projects and activities approved in 2004
and after. Subsequently, the ITTC at its 48th Session held in November 2012 approved
the increase of the rates from 8% to 12% and from 13% to 14%), which are adopted for
projects and pre-projects approved in 2013 and after, and activities approved in
November 2012 and after.
ITTO meets such costs through a provision for reserve for programme support whenvoluntary contributions to individual projects are received.
The movements of the reserve for programme support for the years ended December 31,
2015 and 2014 are as follows:
2015
Special
Account

Bali
Account

2014

Executing
AgencyAccount

Total

Special
Account

Bali
Account

Executing
AgencyAccount

Total(U.S. dollars)
Beginningbalance
Inter-accounttransfer
Provided
Usage and others
Ending balance$ 1,508,626 $

34,691(490)
547,549(758,951)

169
5,636
–

$ 1,296,734$ 40,496$–$ 1,543,317 $ 1,193,025 $

1,299

–
553,185(759,272)

18,061
1,183,691(886,151)(19,445)
52,936(99)– $ 1,337,230$ 1,508,626$ 34,691

321
–
(321)

$

–

$ 1,194,324

1,384–(1,384)–
1,236,627(887,634)– $ 1,543,317

15International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Special Accounts and Bali Partnership Fund Account (continued)(14) Reserve for unsettled advance payment
Advances are provided to employees and others in respect to official travel, meetings,
education grants and other such related items. At the time an advance is provided, thevalue of the advance, which may not necessarily be equal to the total actual expenditure
to be incurred, is carried forward as debtors in the balance sheet until the year of
settlement.
Effective from December 31, 2007, a reserve is recorded for those advances provided
for which the expenditure has already been incurred. The total reserve recorded as at
December 31, 2015 is $121,768 (Special (Project Sub-account): $32,840, Special(Pre-project Sub-account): $68,677, Special (Thematic Programmes Sub-account):$4,750 Bali Partnership Accounts: $15,500). The total reserve recorded as at December
31, 2014 was $176,222 (Special (Project Sub-account): $91,850, Special (Pre-projectSub-account): $48,132, Special (Thematic Programmes Sub-account): $2,375 Bali
Partnership Accounts: $33,865). The reserve has been offset against the “Advances toand receivables from staff members and others” account in the balance sheet. The
reserve remains in the balance sheet until such time as all supporting documentation is
submitted to ITTO by the individuals who received the advance.
Reclassification
Certain reclassifications to the prior year’s financial statements amounts have been made toconform to the presentation for the current year.
Reclassification in the section of members’ fund.
The management decided at the end of 2015 to transfer $7,208,900 to Unappropriated Funds
out of the Appropriated funds, which had no commitments to projects/activities,for the
purpose of identifying the amount available in the Unappropriated funds.
This
reclassification was applied to the balance of the accounts as of the end of year of 2015 andreflected in the financial statements of the year of 2015.

16

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Change in accounting policies
In the 2015 Financial Statements, ITTO adopted an accounting policy change to provide
reliable and more relevant information about the effects of transactions and conditions on its
financial position.
The accounting policy of the previous financial statements (2014 and before) only recognized
expenses arising from funds (i.e., Members’ voluntary contribution under the ITTA) received
or to be received from donors when their payment to the executing agency was processed.
However, by reviewing the arrangement of existing projects, the management reached to theconclusion that the accounting policy was insufficient to provide the full and precise pictureof the liabilities which ITTO has to pay to recipient Members based on its internationalbinding obligations arising from the bilateral Exchange of Notes with a donor country, toundertake programs to implement a part of the country’s development assistance scheme,
which is independent from ordinary projects carried out within the framework of the ITTA.
In this light, the change was introduced to better reflect ITTO’s obligations concerning those
programs, arising from the bilateral Exchange of Notes mentioned above, by which the entire
amount of the unused portion of the funds received by ITTO for this purpose shall be
registered as liabilities.
This change has been applied retrospectively in the Financial Statements. The following
tables show the effect of the changes in previous periods. The effects of the changes before
2014 have been considered impracticable to determine. Consequently, the new accounting
policy has been applied to the opening balance of 2014 of liabilities and each affectedcomponent of equity.

17

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Change in accounting policies (continued)

AssetsLiabilities and contributions
Members' funds

January 1st, 2014 - consolidated accounts
Previously published
Change inaccounting policies
38,326,258
05,800,715
4,729,192
32,525,542-4,729,192
December 31st, 2014 - consolidated accounts
Previously published
Change inaccounting policies

Revised38,326,258
10,529,907
27,796,350

RevisedAssetsLiabilities and contributions
Members' funds

38,841,939
4,909,424
33,932,515

0
4,241,912-4,241,912

38,841,939
9,151,336
29,690,603

Revenues and Expenditures

1,171,052

487,279

1,658,331

AssetsLiabilities and contributions
Members' funds
Revenues and Expenditures

December 31st, 2015 - consolidated accounts
Former accounting
Change inpolicies
accounting policies
20,394,391
0
4,350,623
3,419,507
16,043,768-3,419,507-16,743,969

822,406

Revised20,394,391
7,770,130
12,624,261-15,921,563

18

International Tropical Timber Organization
Notes to Financial Statements (continued)

2.

Significant Accounting Policies (continued)

Additional Information
Because of the Provision for Impairment of Investment in securities described in this section,
the financial position of ITTO has been significantly deteriorated. As a result, themanagement has temporary suspended payments to relevant projects at least until theInternational Tropical Timber Council (ITTC) convenes in November 2016.
In this regard, the management has taken actions to deal with the situation. As of the reporting
date, USD 6 million of replacement funds have been identified by the Oversight Committee(OC) established by the ITTC decision adopted in November 2015 to provide guidance on theissue of the impaired investments. Furthermore, the OC pointed out that seeking additional
contributions from donors in order to covr the loss is not an appropriate option, and hence the
ITTC ought to consider termination and/or downsizing of some of the ongoing projects asnecessary, which will be decided as proposals at the ITTC in November 2016. The
management believes such actions on the proposals will ensure to ITTO the ability tocontinue the same level of operation. However, a material uncertainty exist that may cease
ITTO’s ability to continue the same level of operations until the proposals are approved by the
ITTC.
The financial statements were prepared with a going concern assumption.
3.

Elimination Financial Statements

During the year ended December 31, 2015, $350,000 was eliminated on consolidation due totransfer from the Working Capital Account in the Administrative Account to the Special
Account to allocate funds to to Activity PP-A/51-313 and PP-A/51-314, as adopted in
Decision 1(L).
4.

Significant subsequent events.

Provision for Impairment of Investment in securities
USD 12,014,000 of the provision was provided on the balance of the investment in ArdentFund. On 26th April, 2016, Blackstar Capital Star Limited, the solo owner of Ardent Harmony
Inc. presented a petition of voluntary liquidation to the Grand Court of the Cayman Island andthe court issued a supervision order that the liquidation of Ardent Harmony Inc be continued.
The management received an official report from the liquidator dated on 20th June, 2016.
Based on the content regarding the residual assets, the management estimated collectible
amount from the investment, which includes a claim for a legal cost against ITTO injunction.

19

Schedule I

International Tropical Timber Organization
Balance Sheet Schedule

Administrative
Account

Total
AssetsCash and time deposits
Net Investments in securities
Investments in securities
Less: Provision for Impairment on
security

Accounts receivable from Executing
Agencies AccountPrepaid expenses
Advances to and receivable from staff
members and others
Advances to Special Account
Accounts receivable from Bali
Partnership Fund AccountInter-account balance
Accrued revenue
Liabilities and contributions
Accounts payable to Special Account
Accounts payable to Executing
Agencies Account
Accounts payable to staff members
and others
Advances payable to JapanAccrued liabilities
Liabilities arising from Exchange of
Notes
Membership contributions received inadvance
Accounts payable to Bali Partnership
Fund AccountUnappropriated fundReserve for programme support

20,018,577-

10,133,637-

December 31, 2015
Special AccountThematic
Project
Programmes
Sub Total
Sub-Account
Subaccount(U.S. dollars)
3,763,172
3,763,172-

Bali Partnership
Fund AccountExecuting
Agencies

5,431-

Elimination

6,116,337--

12,014,000

-

-

-

-

-

12,014,000-(12,014,000)

-

-

-

-

-

(12,014,000)

-

-

-

1,415,656-

1,415,656

30,967,226-(32,382,882)

35,65835,658

-

-

-

-

-

-

339,840

134,562

195,7882,300

198,088

7,190

-

-

-

-

-

-

-

26,575,437(26,575,437)--

29,158,779

586,422

29,745,201--(29,745,201)

316
20,394,391

316
10,304,173(1,482,548)
33,050,846

1,482,548
2,071,270

35,122,116

30,979,847

32,691,774(88,703,520)

-

-

-

-

-

29,655,921-(29,655,921)--

27,286,327

704,766

27,991,093--(27,991,093)

10,089

-

4,543

1,390

5,933

4,156

-

-

122,423
397,812

122,423
321,253

68,245

6,442

74,686

1,873

-

-

3,419,632

-

-

-

-

-

3,419,632-

46,70546,705

-

-

-

-

-

-

-

-

89,280-89,280-30,967,226(31,056,506)

2,436,238
1,337,230
7,770,130

490,382

1,543,794
825,428
29,817,617

892,443
471,306
2,076,347

2,436,238
1,296,734
31,893,964

40,49629,702,446

34,386,858(88,703,520)

20

Schedule I

International Tropical Timber Organization
Balance Sheet Schedule (continued)

Total
Members’ funds
Special Reserve
Reserve provided by interest income
Surplus of revenues over expenditures
Appropriated for specified projects
Unappropriated funds
Surplus from completed projects
Impairment of Investments insecurities
Provision for Impairment of
Investment in securities
Arrears in assessed contributions
Allowance for arrears
Liabilities and members’ funds

Administrative
Account

December 31, 2015
Special AccountThematic
Project
Programmes
Sub Total
Sub-Account
Subaccount(U.S. dollars)(101,519)(4,750)(106,269)
1,599,652(327)
1,599,325
1,735,096
1,735,096

1,500,000
2,009,132
12,494,981
16,160,443
2,306,874
2,324,698

1,500,000
2,009,132
12,494,981-(5,967,546)

-

-

-

(12,014,000)--

18,814,583(6,215,042)
24,72020,394,391

16,004,114(6,215,042)
24,72010,304,173

Bali Partnership
Fund AccountExecuting
Agencies

Elimination(19,750)
707,549
589,602

16,286,461
-

-

-

-

(5,967,546)

-

-

-

-

(12,014,000)-

3,233,229-(5,077)-3,228,152-

1,277,402-(1,695,084)--

33,050,846

2,071,270

35,122,116

30,979,847

32,691,774(88,703,520)

21

Schedule II

International Tropical Timber Organization
Schedule of Revenues and Expenditures
Total

Administrative
Account

Year ended December 31, 2015
Special AccountThematic
Programmes
Sub Total
SubaccountProject
Sub-Account

Bali
Partnership
Fund AccountExecuting
Agencies

Elimination

U.S. dollars
Revenues:
Contributions from members countries
Reimbursement by Japan
Voluntary contributions
Interest income
Other income

7,952,059
260,077
4,825,627
403,663
2,012
13,443,437

7,952,059
260,077845
2,012
8,214,992

4,432,230
201,409
4,633,638

743,397743,397

5,175,627
201,409
5,377,035

201,409
201,409675,258
675,258(350,000)(675,258)(1,025,258)

3,467,839
86,515710,284
37,470122,156
244,892
201,123
100,003428,675
251,157
30,00037,340330,000-

3,467,839
86,515710,284
37,470122,156
244,892
201,123
100,003428,675
251,157
30,00019,974-

17,252330,000-

114-

17,367330,000--

276,105(276,105)

-

-

-

-

-

-

399,153(399,153)(122,627)(49,884)(61,003)

2,375(58,628)(14,115)

-

-

-

-

-

-

-

-

-

-

12,014,000

-

-

-

-

-

12,014,000-

Project cost

17,938,829
11,426,172
29,365,000

5,650,206
5,650,206

286,249
8,891,625
9,177,874

2,489
1,887,409
1,889,898

288,738
10,779,034
11,067,772(14,115)
647,138
633,022

12,689,258
12,689,258(675,258)(675,258)

Excess of revenues over expenditures/(Excess of expenditures over revenues)(15,921,563)

2,564,787(4,544,236)(1,146,501)(5,690,737)(431,613)(12,014,000)(350,000)

Expenditures:
Salaries and benefits
Official travel
Social security
Special activities
Data processing
Other costs
Council meetings
Expert meetings
Communication and outreach
Statistics, Studies and information
Annual Report and Biennial review
Exchange loss
Write-off of arrears in contributions
Financial Fee
Transfer of interest to Special Account andBali Partnership Fund AccountTime delay (Reversal of time delay) in settling
fellowship and other advance payments
Gain & Loss on Securities
Write-off arrears in voluntary contributions
Increase in Provision for Impairment of
Investment in securities

22International Tropical Timber Organization

Schedule III

Balance Sheet Schedule

Total

Administrative
Account

Project
Sub-AccountDecember 31, 2014
Special AccountThematic
Programmes
Subaccount
Sub Total

Bali Partnership
Fund AccountExecuting
Agencies

Elimination

8,115,753
12,200,000
–
–
–
–
–
30,290,156––
438,098$51,044,007––––(30,118,766)––(30,290,156)(28,869,201)––$(89,278,123)(U.S. dollars)
AssetsCash and time deposits
Investments in securities
Arrears in voluntary contributions
Accounts receivable from Japan
Accounts receivable from Executing Agencies AccountPrepaid expenses
Advances to and receivable from staff members and others
Advances to Special Account
Accounts receivable from Bali Partnership Fund AccountInter-account balance
Accrued revenue
Liabilities and contributions
Accounts payable to Special Account
Accounts payable to Executing Agencies Account
Accounts payable to staff members and others
Accounts payable to JapanAccrued liabilities
Liabilities arising from Exchange of Notes
Membership contributions received in advance
Accounts payable to Bali Partnership Fund AccountUnappropriated fundReserve for programme support
Members’ funds
Special Reserve
Reserve provided by interest income
Surplus of revenues over expenditures
Appropriated for specified projects, pre-project and activities
Unappropriated funds
Surplus from completed projects, pre-project and activities
Impairment of Investments in securities
Arrears in assessed contributions
Allowance for arrears
Liabilities and members’ funds$23,454,660
12,200,000
2,105,391
284,112–39,336
320,109–––438,332$38,841,939$––
21,75596,679572,515
4,241,912
176,272–2,498,885
1,543,317
9,151,335

1,500,000
2,078,016
10,396,840
29,886,585(5,137,477)
2,315,257(5,967,546)
35,071,675(5,405,793)
24,720$38,841,939

–
–
–
–
–
–
–
–
586,422
3,102,873–$3,689,295$ 6,483,087–
2,105,391–––
157,023–
28,869,201––
37,614,702

$

5,431
–
–
–
30,118,766
–
–
–
–
–
–
$30,124,196$–
1,848,778
915
–
6,358
–
–
–
1,358,525
477,306
3,691,882$–
30,290,156
12,374–
101,301–––
2,498,885
1,508,626
34,411,342$28,869,201
–
9,381
–
793
–
–
–
–
34,691
28,914,066

$

–
–
–
–
–
4,241,912–
30,118,766––
34,360,678$(28,869,201)(30,290,156)
–
–
–
–
–
(30,118,766)––(89,278,123)–––
2,932,882(1,454,336)
1,727,401–––
19,456(22,043)––––2,952,338(1,476,380)
1,727,401–––
4,283,372(3,661,097)
587,856

–
–
–
–
–
–

3,205,947––$33,925,407(2,587)––$3,689,295

3,203,360––$37,614,702

1,210,131––$30,124,196–––
22,650,874––(5,967,546)
16,683,329––$51,044,007$ 8,850,389––
284,112–39,336
163,086–––235$ 9,337,157$ 6,483,087–
2,105,391–––
157,023–
28,282,779(3,102,873)–$33,925,407

$

–
–
–
96,679470,422–
176,272–––
743,373$–
28,441,378
11,459–94,942–––
1,140,360
1,031,320
30,719,460$

1,500,000
2,078,016
10,396,840–––
13,974,857(5,405,793)
24,720$ 9,337,157

$

$

–
–
–
$(89,278,123)23

Schedule IV

International Tropical Timber Organization
Schedule of Revenues and Expenditures

Revenues:
Contributions from members countries
Reimbursement by Japan
Voluntary contributions
Rectification
Pledged not received
Interest income
Dividends
Other income
Expenditures:
Salaries and benefits
Official travel
Social security
Special activities
Data processing
Other costs
Council meetings
Communication and OutreachExpert meetings
Statistics, Studies and Information
Annual Report and Biennial review
Write-off of arrears in contributions
Exchange loss
Time delay (Reversal of time delay) in settling advancepayments
Gain & Loss on Securities
Project cost
Transfer of interest to Special Account andBali Partnership Fund AccountExcess of revenues over expenditures/(Excess of expenditures over revenues)

Year ended December 31, 2014
Special AccountThematic
Programmes
Subaccount
Sub Total
U.S. dollars

Total

Administrative
Account

Project
Sub-Account$ 7,322,796
772,803
11,181,747(864,420)(32,302)952,895
64,84734,746
19,433,111$7,322,796
772,803–––
18,81864,8472,292
8,181,556$

3,695,896
122,895
725,51432,01586,628205,545693,228
428,054
129,376
283,034
30,28655,755124,570

3,695,896
122,895
725,51432,01586,628205,545693,228
428,054
129,376
283,034
30,28655,755
124,353

–
–
–
–
–
–
–
–
–
–
–
–
118

–
–
–
–
–
–
–
–
–
–
–
–
77

–
–
–
–
–
–
–
–
–
–
–
–
195

–
–
–
–
–
–
–
–
–
–
–
–
22

–
–
–
–
–
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–
–

(46,368)
81,592
11,126,761–

40,54589,876––(67,287)(4,142)7,870,594–(17,500)–
2,812,898–(84,787)(4,142)
10,683,492–(2,125)(4,142)443,268––(8,284)–
937,603–8,284–(937,603)

17,774,781$ 1,658,331

6,743,000$ 1,438,556

7,799,283$ 542,351

2,795,475$ (410,957)

10,594,758$ 131,394

437,023$ 120,926

929,319$ 32,454(929,319)$ (65,000)––
8,739,474(864,420)(500)
467,081––
8,341,634$––
2,384,518–––––
2,384,518––
11,123,992(864,420)(500)
467,081––
10,726,152$

Bali Partnership
Fund Account$––122,755–(31,802)466,997––
557,949

Executing
Agencies–––––
929,319–
32,454
961,773$

Elimination$––(65,000)––(929,319)––(994,319)

24

Financial Statements of
the Administrative AccountInternational Tropical Timber Organization
December 31, 2015 and 2014

International Tropical Timber Organization
Administrative AccountFinancial Statements

December 31, 2015 and 2014

Contents
Report of Independent Auditors ............................................................................................. 1
Balance Sheets ........................................................................................................................ 2
Statements of Revenues and Expenditures ............................................................................. 3
Statements of Changes in Fund Balance ................................................................................ 4
Statements of Cash Flows ...................................................................................................... 5
Notes to Financial Statements ................................................................................................ 6

International Tropical Timber Organization
Administrative AccountBalance Sheets

December 31,
2015
2014
(U.S. dollars)
AssetsCash and time deposits
Investments in securities (Note 1)
Accounts receivable from Japan
Prepaid expenses
Advances to and receivable from staff members andothers
Accrued revenue

Liabilities and contributions
Accounts payable to JapanAccrued liabilities
Membership contributions received in advance (Note 2)
Members’ funds
Special reserve (Note 1)
Reserve provided by interest income (Note 1)
Surplus of revenues over expenditures
Arrears in assessed contributions (Note 2)
Allowance for arrears (Note 1)$ 10,133,637––
35,658$ 8,850,389–
284,11239,336

134,562316$ 10,304,173

163,086235$ 9,337,157$ 122,423
321,253
46,705490,382$

96,679470,422
176,272
743,373

1,500,000
2,009,132
12,494,981
16,004,114

1,500,000
2,078,016
10,396,840
13,974,857(6,215,042)
24,720$ 10,304,137(5,405,793)
24,720$ 9,337,157

The accompanying notes are an integral part of these statements.

2

International Tropical Timber Organization
Administrative AccountStatements of Revenues and Expenditures

Year ended December 31,
2015
2014
(U.S. dollars)
Revenues:
Contributions from member countries (Note 2)
Reimbursement by Japan (Note 3)
Interest income from deposit
Interest income from contribution
Dividends
Other income
Expenditures:
Salaries and benefits
Official travel
Social security
Special activities
Data processing
Other costs
Council meetings
Communication and OutreachExpert meetings by Council
Statistics, Studies and Information
Annual Report and Biennial review
Exchange loss
Time delay (reversal of time delay) in settling advancepayments
Gain and Loss on securities
Allowance expense for arrears
Excess of revenues over expenditures before write-offof arrears in contribution and advance payments
Write-off of arrears in contributions (Note 2)
Excess of revenues over expenditures$7,952,059
260,077
845
–
–
2,012
8,214,992$7,322,796
772,803503
18,31464,8472,292
8,181,556

3,467,839
86,515710,284
37,470122,156
244,892
201,123
428,675
100,003251,157
30,00019,974(49,884)

3,695,896
122,895
725,51432,01586,628205,545693,228
428,054
129,376
283,034
30,286124,353
40,545––5,650,206

89,876–
6,687,244

2,564,787–$ 2,564,787

1,494,311
55,755$ 1,438,556

The accompanying notes are an integral part of these statements.

3

International Tropical Timber Organization
Administrative AccountStatements of Changes in Fund Balance
For the years ended December 31

Reserve
Surplus ofprovided byrevenues overinterest income
expenditures(U.S. dollars)Specialreserve
2014
Member’s funds as of January 1, 2014
Excess of revenues over expenditures
Utilization of members fund provided
by interest income for consultant fee(Decision 2 (XXXIV))
Transfer to Special account for the
Study on Regional ITTO Presence
and the Smooth Transition of theOrganization
Adjustment of prior year
Transfer to reserve on interest income
Members’ funds as of December 31, 2014
2015
Excess of revenues over expenditures
Utilization of members fund provided
by interest income for consultant fee(Decision 2 (XXXIV))
Transfer to Special account for theOversight Committee and Selectionof Executive Director
Adjustment of prior year
Transfer to reserve on interest income
Members’ funds as of December 31, 2015

Total

$1,500,000–$2,072,728–$9,180,770$1,438,556$12,753,498$1,438,556–(60,062)–(60,062)–––$1,500,000––
65,350$2,078,016(65,000)(92,136)(65,350)$10,396,840(65,000)(92,136)–$13,974,857–$2,564,787$2,564,787–(69,729)–(69,729)–––$1,500,000––
845$2,009,132(350,000)(115,801)(845)$12,494,981(350,000)(115,801)–$16,004,114

$

–

$

The accompanying notes are an integral part of these statements.

4International Tropical Timber Organization
Administrative AccountStatements of Cash Flows

Year ended December 31,
2015
2014
(U.S. dollars)
Excess of revenues over expenditures transferred tomembers’ funds
Changes in assets and liabilities:
Arrears in assessed contributions
Investments in securities
Accounts receivable from Japan
Prepaid expenses
Advances to and receivable from staff members andothers
Accrued revenue
Accounts payable to JapanAccrued liabilities
Membership contributions received in advance
Changes in members’ funds:
Adjustment of prior year
Cash disbursement as Decision 2 (XXXIV)
Transfer to Special account for the Study on Regional
ITTO Presence and the Smooth Transition of theOrganization
Net increase / (Net decrease) in cash
Cash and time deposits at beginning of year
Cash and time deposits at end of year

$ 2,564,787(809,249)$

1,438,556

284,112
3,678

1,018,973
2,661,960(284,112)(38,297)

28,524(81)
25,744(149,168)(129,567)(17,948)
49,894(8,474)
218,085
44,078(115,801)(69,729)(92,136)(60,062)(350,000)
1,283,249(65,000)
4,865,517

8,850,389$10,133,637

3,984,872$8,850,389–

The accompanying notes are an integral part of these statements.

5

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements

1. Significant Accounting Policies
See Note 2 to the financial statements of ITTO.

2. Contributions
The contribution of each member to the administrative budget for each financial year isassessed in the same proportion as its votes bear to the total votes of all the members.
Contributions become due on the first day of each financial year. If after seven months fromthe due date a member has still not paid the full contribution, its voting rights shall besuspended until such time as it has paid in full the contribution, unless the ITTC, by special
vote, decides otherwise. Prior to December 31, 1996, interest was charged to members fordelayed payments of their contributions. The interest was calculated using the host country’s
central bank rate. Accrued interest on arrears in contributions that had been previously
charged to the members of $82,615 was not recorded in the financial statements at December
31, 2015 and 2014, respectively.
The ITTC, at its Thirty-third Session, authorized the Executive Director, to write off on anannual basis, one-fifth of a Member’s arrears of the period 1986-1996 for any Member which
has no arrears in its contributions to the Administrative Budget in respect to its obligations
related to the year 2002 and beyond. In 2015, there were no Members who received a write
off for their arrears.

6International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
The arrears in contributions balance at December 31, 2015 consists of the following:*Prior to

Part
XXIV
(2007)Part XXIII

Part
XXV
(2008)Part
XXVI(2009)Part
XXVII(2010)Part
XXVIII(2011)

Part
XXIX(2012)Part
XXX(2013)Part
XXXI(2014)Part
XXXII(2015)––––$ 116,907–
113,136–$(112,573)–(113,136)
–

$

Total

(U.S. dollars)
Producing members:
Benin
Bolivia
BrazilCameroon
Central African
Republic
Congo
Costa Rica
Côte d'Ivoire
Democratic Republic of
the Congo
Fiji
Gabon
Ghana
Honduras
India
Liberia (Note)
Mali
Mozambique
MyanmarNigeria
PanamaPapua New Guinea
Peru
Suriname
Togo
Vanuatu
Venezuela
Viet Nam
Consuming members:
Albania
GreeceNepal
Portugal
Republic of Korea
Russian Federation
Total

$

–
704,471––$–
61,083–––
68,950––$$–72,10051,40874,984–78,875457,475(74,984)$–
90,575(508,883)
–

$

$

6,433
–
–
–

$ 10,767
1,076,054––

137,970
408,887––

66,636
69,411––

68,95024,813––

72,10072,100––82,03082,030––97,821
81,931–––(84,110)–––(276,045)
8,193–

12,788(379,017)(8,193)–82,25024,491–
89,403

620,545
24,491–
89,403877,294–––
243,828–
401,868
–
–
2,123
4,211
–
–
–
302,036
220,182
110,268––

69,412
–
–
–
–
–
–
–
–
203
–
–
–
–
2,140
–
36,095––

68,950
–
–
–
–
–
–
–
–
3,077
–
–
–
–
–
–
38,612
57,918–74,984––––
38,272(59,125)––
106,708–––––
68,30840,37660,564–82,030
10,54258,228––(38,272)–––
138,820
82,0307,360––(104,220)(288,491)
41,015––

101,444(10,542)
101,444
30,000–101,444–––(248,833)
27,501
5,616––(111,282)–
47,09976,083–

105,392–
18,246(30,000)(4,936)45,792(38,790)––(2,098)–(12,976)–
3,186(88,674)––(109,457)–

120,678–
116,907
86,90771,653
169,704
116,907
116,907
116,907
7,740–––
173,832–––––

87,327–87,327(6,031)(46,457)(316,940)
83,969(37,275)(116,907)(7,740)–––(177,018)––––
45,89892,979–54,552(80,876)––
89,40389,403
92,97953,642
89,403––(45,898)

1,680,490–
436,704–
264,088–594,232
169,035
92,979–113,742–
129,967–
53,642
89,403
313,465
85,108–3,413,138

304,980

331,270

672,779

614,468(118,582)(198,426)

1,060,334(1,003,978)768,130

5,844,112––
27,060––24,720––27,765–––––27,580–––––28,840–––––31,550––––43,47636,23058,617
72,127––––(58,617)(72,127)–

41,828–––––40,761–––––

41,119–––––123,708
43,476
179,025––
24,720––129,967

51,78027,76527,58028,84031,550210,450(130,744)

41,82840,761

41,119370,929$3,464,918$332,745$358,850$701,619$ 646,018$ 91,868$(329,170)$1,102,162$(963,217)$809,249$6,215,042

Note: Liberia – Reduction of arrears(a) Contributions for 1997 – 2001 were reduced by 70% in accordance with Decision 5(XLIII), Annex, item II.
(b) Contributions for 2003 – 2005 were reduced by 80% in accordance with Decision 5(XLIII), Annex, item III.
7

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
Part I to XV(1986 – 1998)
Original

Write-off inPart XVIPart XVIIPart XVIIIPart XIX

Part XXPart XXIPart XXIIPart XXIII

amount2002 – 2015

(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)

Total(U.S. dollars)
Producing members:–$ 59,769–$ 52,800$ 55,680$ 60,674$ 64,460$ 59,532$704,471

–

–

–

–

–

–

–

–

70,32067,650137,970

379,251(167,265)

51,52548,70032,894––––63,782408,887

Costa Rica–

–

–

–

–

–

–

–

–

–

–

–

Côte d’Ivoire

402,517(402,517)

–

–

–

–

–

–

–

–

–
877,294

Bolivia$ 351,556

Central African Republic

Congo

$

–

$

$

Democratic Republic of
the Congo

388,497–

51,52556,00059,54057,20060,32063,31273,25067,650Gabon

193,130(193,130)

–

–

–

–

–

–

–

–

–

Honduras

220,975

–

–

–

–

–

–

–

–

22,853

243,828

Liberia (Note)

389,633(75,988)

15,45816,80017,175–

12,064

12,662

14,064–

401,868

Myanmar

–

–

–

–

–

–

–

–

–

2,123

2,123

Nigeria

–

–

–

–

–

–

4,211

–

–

–

4,211

8,245

–

35,03735,84036,64033,00034,80039,57041,02037,884

302,036

366,743(314,770)

48,857

16,070––32,962–70,320–220,182

–

–

–

–

–

–

–

34,29438,09037,884110,268

2,700,547(1,153,670)

262,171

173,410146,249

143,000

200,037

210,512371,524

359,358

3,413,138

Suriname
Togo
Vanuatu

Consuming members:
Nepal
Russian federation

Total

–

–

–

–

–

–

–

–

–

27,06027,06024,720

–

–

–

–

–

–

–

–

–

24,72024,720

–

–

–

–

–

–

–

–

27,06051,780$2,725,267 $(1,153,670)$262,171$173,410$146,249$143,000$200,037$210,512$371,524$386,418$3,464,918

Note: Liberia – Reduction of arrears
In 2007, contributions for 1997 – 2001 were reduced by 70% in accordance with Decision 5(XLIII), Annex, item II in the amount of $340,837.

Details of write-off of Members’ arrears incurred in the period 1986 – 1996 is as follows:
Prior to
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total

(U.S. dollars)
Producing members:Congo
Côte d’Ivoire
Gabon
LiberiaTogo$111,510
322,014
154,504–
62,954$–80,503
–
–
–

$

–
–
38,626
–
–

$

–
–
–
–
–

$

Total

$650,982$80,503$38,626$–$ 62,954––––
62,954––––62,954$–––75,988
–

$

–
–
–
–
125,908$55,755
–
–
–
–

$

–
–
–
–
–

$167,265
402,517
193,130
75,988314,770$62,954$75,988$125,908$55,755$–$1,153,670$

8International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
In relation to the write-off of the above arrears in contributions, interest charged to themembers for the period from 1986 to 1996, which were not recorded in the financial
statements, were also written off. The status of interest previously charged and written-off at
December 31, 2015 is as follows:
Interest charge for arrears for the period
from 1986 to 1996
Original
Write-off in
Remaining
amount2002 – 2015
balance(U.S. dollars)
Producing members:
Bolivia
Congo
Côte d’Ivoire
Democratic Republic of the Congo
Gabon
Honduras
Liberia (*1)
TogoConsuming members:
Russian federation
Total$ 30,927
45,78641,022
15,33446,53836,23735,29518,766
269,905$–(45,786)(41,022)–(46,538)–(35,295)(18,766)(187,407)$ 30,927––
15,334–36,237––82,498

117
117$270,022––$(187,407)

117
117$82,615*1 Liberia’s interest on assessed contribution from 1986 – 1996 was waived pursuant to
Decision 5 (XLII).
Contributions received in advance from Members at December 31, 2015 and 2014 are as
follows:
2015
2014(U.S. dollars)
Australia
Cameroon
Congo
Ecuador
New Zealand
NorwayPapua New Guinea
Total–45,415
–
100
–
1,190
–
$46,705$$ 65,790
69
64,912
198
45,231–
72$176,272

9International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
Assessed contributions from member countries for 2015 and 2014 were as follows:
2015

Budgeted receipts
Producing members:
Benin
BrazilCambodia
Cameroon
Central African Republic
Colombia
Congo
Costa Rica
Côte d’Ivoire
Democratic Republic of
the Congo
Ecuador
Fiji
Gabon
Ghana
Guatemala
GuyanaHonduras
India
Indonesia
Liberia
Mali
Malaysia
MexicoMozambique
MyanmarPanamaPapua New Guinea
Peru
Philippines
Suriname
Togo
Trinidad and Tobago
Viet Nam

2014

Assessed

Discount
Net(U.S. dollars)$ 89,403
511,381
75,09992,97982,25092,97889,40346,49089,403$

92,97967,94664,37092,97989,40346,49060,79446,490114,434
296,815
89,40389,403
450,587
96,554
92,979189,533
50,065
146,620
114,434
64,37053,642
89,40342,91364,3703,776,362

–
–
–
–
–
–
–
–
–

$ 89,403
511,381
75,09992,97982,25092,97889,40346,49089,403

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

92,97967,94664,37092,97989,40346,49060,79446,490114,434
296,815
89,40389,403
450,587
96,554
92,979189,533
50,065
146,620
114,434
64,37053,642
89,40342,91364,3703,776,362

Net$

83,969500,343
66,15387,327–
90,97083,96945,486
83,96987,327
63,81757,091
87,327
83,96940,04957,09943,664
107,479
278,777
83,96983,969397,657
90,68687,327
178,01347,023
137,708
107,479
56,471–
83,96936,779–3,339,835

10

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
2015

Consuming members:
Albania
Australia
Austria
Belgium
Bulgaria
China
CyprusCzech Republic
Denmark
Estonia
FinlandFranceGermany
GreeceHungary
Ireland
Italy
Japan
LatviaLithuania
Luxembourg
Malta
Netherlands
New Zealand
NorwayPolandPortugal
Republic of Korea
Romania
Slovakia
Slovenia
Spain
SwedenSwitzerland
United Kingdom
United States of America

2014

Assessed

Discount
Net(U.S. dollars)$$

41,11965,79045,231
61,67945,231
1,040,309
41,11949,34349,343
41,11941,119131,581
78,12745,231
41,11957,567
115,133
645,568
41,11941,11941,11945,231
131,581
45,231
41,11945,231
61,679271,384
41,11945,231
41,11994,57445,231
49,343106,909287,833
4,111,900

–

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–

$

41,11965,79045,231
61,67945,231
1,040,309
41,11949,34349,343
41,11941,119131,581
78,12745,231
41,11957,567
115,133
645,568
41,11941,11941,11945,231
131,581
45,231
41,11945,231
61,679271,384
41,11945,231
41,11994,57445,231
49,343106,909287,833
4,111,900

Net$

40,761
61,72142,42657,89642,307
978,833
38,46046,152
46,29338,46038,568
123,472
73,30242,43338,46054,006108,043
605,968
38,46038,46038,46042,307
123,70342,426
40,76142,43757,873
255,131
38,46042,30738,46088,96342,433
46,283
100,321285,326
3,880,13211

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
2. Contributions (continued)
2015

Assessed

2014

Discount
Net(U.S. dollars)Net

Late joining members *Producing members:
Central African Republic
Croatia
SurinameThailand
Viet Nam$–$

27,938–35,859–63,797

Total of budgeted receipts*$7,952,059

$

–
–
–
–
–
–
–

$

–

$ 12,788

27,938––44,14435,859––63,79745,898102,830$7,952,059$7,322,796

In accordance with ITTA, 2006, Article 19, Paragraph 6, “[t]he initial contribution of any
member joining the Organization after the entry into force of this Agreement shall beassessed by the Council on the basis of the number of votes to be held by that member
and the period remaining in the current financial biennium, but the assessment made uponother members from the current financial biennium shall not thereby be altered.”12International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
3.

Expenditures
2015
BudgetSalaries and benefits:
Salaries
Post adjustment
Rental subsidy
Education grant
Dependence allowance
Home leave
Language allowance
Overtime
Mobility and hardship allowance
Separation benefits
Removal costs
Repatriation/Recruitment travel
Sub-Total

2014
ActualBudget(U.S. dollars)

Actual$ 2,308,694
1,461,219
2,831
302,563
86,893
127,681–
32,5696,953
255,356
49,261
137,931
4,771,951$1,988,395
745,719–
152,604
63,64445,415–
12,1082,700
146,81337,374
12,991
3,207,762$2,263,425
1,432,568
2,831
302,563
86,893
106,401–
31,9306,953
106,785
20,60057,6804,418,629$2,055,654
1,006,281–
142,467
69,546
104,500–
14,745
4,050
9,962
–
–
3,407,205

Installation costs:
Assignment grantLump-sum benefit
Sub-Total

113,004
131,948244,952–––

47,25655,178102,434–––

Official travel:
Transportation/Tickets
DSA and travel expenses
Sub-Total

95,93745,765
141,70266,44320,07386,51595,93745,765
141,702

68,99853,897
122,895

Social security:
Provident fund
Accident/Health insurance
Japanese national scheme
Sub-Total

716,661
110,377
138,302965,340

526,927
70,094113,263710,284

702,609108,213
135,590
946,412534,41160,748130,355
725,514

Special activities:
Consultants
Workshops and meetings
Other activities
Sub-Total

35,362
13,70812,01861,08834,330–3,140
37,47035,362
13,70812,01861,08826,468–5,547
32,015

48,14946,83348,14928,12474,974
7,441
130,564

74,912
411
122,156

74,974
7,441
130,564

54,775
3,729
86,628

Data processing:Computer software and servicing
Communications, user charges
and supplies
Training and staff development
Sub-Total

13

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
3. Expenditures (continued)
2015

2014

BudgetActualBudget(U.S. dollars)

ActualOther costs:
Communications
Publications
Transport
Library
Supplies
Hospitality
Bank Charges
Audit
Miscellaneous
Sub-Total$52,634
32,58097,006
13,63747,535
14,87815,080111,5376,419
391,306$33,082
7,061
44,894
8,115
12,104
6,599
7,466
111,537
14,034
244,892$52,634
32,58097,006
13,63747,535
14,87815,080111,5376,419
391,306$13,486
10,222
47,464
4,435
28,813
9,382
8,585
82,990168
205,545

Council meetings:
Costs not met by Japan
Council Session Outside Japan
Sub-Total

9,952
200,000
209,952

1,161
199,962
201,123

9,952
200,000
209,952

9,116
200,000
209,116

Costs met by Japan:
Staff assessment( *1)
Council meetings
Sub-Total

285,821–285,821260,077–
260,077

280,217–280,217

288,691
484,112772,803

–
–

–
–

–
–

–
–

(121,025)–––

260,000
84,65484,021
428,675

260,000
84,65484,021
428,675

260,000
84,65484,021
428,675

287,870
85,60754,577428,054

140,000
140,000

100,003
100,003

140,000
140,000

129,376
129,376

Costs met by Special Account:
Translation costs regarding
Council meetings
Sub-Total
Allocation from working capital
account
Communication andOutreach( *2):
Publications
Outreach
ITTO Website
Sub-Total
Expert meetings by Council( *2):
Expert meetings/Workshops
Sub-Total

14

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
3. Expenditures (continued)
2015

2014

BudgetActual

200,000
35,00040,00020,000295,000

200,000
14,70436,41043
251,157

200,000
35,00040,00020,000295,000

197,397
30,02438,64016,973
283,034

30,00030,00030,00030,286––40,000–30,00030,00070,00030,286

Exchange loss, net–

19,974–

124,353

Time delay in settlingadvance payments–(49,884)–

40,545––
7,975,326––
5,650,206––
7,615,979

89,876–
6,687,244(285,821)(260,077)(280,217)(772,803)–$7,689,505–$5,390,129–$7,335,762–$5,914,441

Statistics, Studies andInformation( *2):
Market Information Services
Market Discussion
Relevant Market Studies
Work on Statistics
Sub-Total

Budget(U.S. dollars)

ActualAnnual Report and Biennial
review( *2) :Annual Report
Biennial Review
Sub-Total

Gain on securities, net
Allowance expense for arrears
Total expenditures incurred
Expenditures reimbursed by
Japan
Expenditures reimbursed bySpecial AccountTotal*1 This expenditure is applied to Japanese staff only. Since actual expenditure is
reimbursable by Japan, such expenditure is not included in the budget.
*2

In accordance with ITTA, 2006, Article 19, Paragraph 2, “[t]he Administrative Accountshall include: (a) Basic administrative costs such as salaries and benefits, installation
costs, and official travel; and (b) Core operational costs such as those related tocommunication and outreach, expert meetings convened by the Council and preparationand publication of studies and assessments pursuant to articles 24, 27 and 28 of thisAgreement.”

15

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
4. Provident FundContributions for the Provident Fund for the year 2015 and 2014 were as follows:
2015
2014
(U.S. dollars)
Contributions made during the period:
By staff members
By ITTO – Administrative Account– Other Accounts
Administrative charge paid to trustee:
From ITTO – Administrative Account– Other Accounts
Payment to an insurance company$206,197
492,873
31,481
730,551$200,083
503,578
21,523725,184

59,337
4,332
63,669$794,22062,748
5,325
68,073$793,257

The balance of net assets for the Provident Fund at December 31, 2015 and 2014 were
$8,713,166 and $9,597,474, respectively.

16

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
5.

Working Capital Account Savings from Previous Budgets

The Council in its Decision 7 (XII) created a Working Capital Account within the
Administrative Account in which to place previously paid arrears and savings for future use.
Working Capital Account savings for administrative budgets and receipts of payments ofarrears in contributions at December 31, 2015 and 2014 are as follows:

2015
2014
(U.S. dollars)
Revenues:
Contributions from member countries
Less: Arrears in contribution for current year
Expenditures, net of reimbursement
By Japan and Special AccountWorking capital surplus/deficit from current year
budgetAuthorized allocation by Council for separation costs
Transferred to Special Account for selection of
Executive Director
Transferred to Special Account for the work of theOversight committee
Adjustment of prior year
Working capital savings from prior year’s budgets
Receipts from members for prior year’s arrears
Working capital savings at year-end$ 7,952,059(936,023)
7,016,036$ 7,322,796(358,070)
6,964,726

5,376,109

5,914,441

1,639,927

1,050,285––(100,000)(65,000)(250,000)(115,801)
4,966,123
126,774$ 6,267,022–(92,136)

2,751,687
1,321,287$ 4,966,123

2015
2014
(U.S. dollars)
Surplus of revenues over expenditures and surplus
from completed projects
Less:
Accumulated Other income
Arrears in assessed contributions
Allowance for Arrears
Working capital savings at year-end$ 12,494,981$ 10,396,840(12,917)(6,215,042)(24,925)(5,405,793)(24,720)$ 4,966,123–$

6,267,022

17

International Tropical Timber Organization
Administrative AccountNotes to Financial Statements (continued)
Note:
The ITTC, through its Decision 2 (XXXIV) on the Management of the Administrative Budget,
authorized the Executive Director to use interest and dividends earned in the Administrative
Account to hire, on a temporary and intermittent basis, consultants and contractors to support
the secretariat in carrying out its duties.
2015
2014
(U.S. dollars)
The amount of interest at year end:
Brought forward
Interest and dividends during the year
Expenditures during the year

$ 410,906
845(69,729)$342,022$ 405,618
65,350(60,062)$410,906

18

Financial Statements of
the Special AccountInternational Tropical Timber Organization
December 31, 2015 and 2014

International Tropical Timber Organization
Special AccountFinancial Statements

December 31, 2015 and 2014

Contents
Report of Independent Auditors ............................................................................................. 1
Balance Sheets ........................................................................................................................ 2
Statements of Revenues and Expenditures ............................................................................. 3
Statements of Changes in Fund Balance ................................................................................ 4
Statements of Cash Flows ...................................................................................................... 5
Notes to Financial Statements ................................................................................................ 6

International Tropical Timber Organization
Special AccountBalance Sheets
December 31,
2015
2014
(U.S. dollars)
AssetsCash and time deposits
Arrears in voluntary contributions (Note 5):
Project Sub-AccountThematic Programmes Sub-Account
Accounts receivable from Bali Partnership Fund Account
Accounts receivable from Executing Agencies Account
Advances to and receivable from staff members
and others (Note 1)
Liabilities and contributions
Accounts payable:
Executing Agencies AccountStaff members and others
Accrued liabilities
Accounts payable to Bali Partnership Fund AccountUnappropriated fund:
Project Sub-AccountThematic Programmes Sub-AccountReserve for programme support (Note 1)$

3,763,172$ 6,483,087––
29,745,201
1,415,656

2,105,391–
28,869,201

198,088$ 35,122,116

157,023$ 37,614,702$ 27,991,093
5,933
74,68689,280$ 30,290,156
12,374
101,301

1,543,794
892,443
1,296,734
31,893,964

1,140,360
1,358,525
1,508,626
34,411,342(101,519)

2,932,882

1,599,652
1,735,096(1,454,336)
1,727,401

3,233,229

3,205,947(4,750)19,456(327)–(22,043)–(5,077)3,228,152$ 35,122,116(2,587)3,203,360$ 37,614,702

Members’ funds
Project Sub-AccountAppropriated for specified projects, pre-projects andactivities (Note1,4 and 5)
Unappropriated funds (Note4)
Surplus from completed projects, pre-projects andactivities (Note1and 5)
Thematic Programmes Sub-Account:
Appropriated for specified projects, pre-projects andactivities (Note1,4 and 5)
Unappropriated funds (Note4)
Surplus from completed projects, pre-projects andactivities (Note1and 5)

The accompanying notes are an integral part of these financial statements.
2

International Tropical Timber Organization
Special AccountStatements of Revenues and Expenditures

Year ended December 31,
2015
2014
(U.S. dollars)
Project Sub-AccountRevenues:
Voluntary contributions (Notes 1, 2, 3 and 5)
Rectification
Pledges not received
Interest income
Dividends
Correction to prior year’s budget$

4,432,230––
201,409––
4,633,638$ 8,739,474(864,420)(500)
467,081––
8,341,634

8,891,625
17,252(61,003)
330,000––
9,177,874(4,544,236)

7,870,594
118(67,287)–(4,142)–
7,799,283$ 542,351

743,397–743,397$ 2,384,518–
2,384,518

1,887,409
2,375
114
–
1,889,898$ (1,146,501)

2,812,898(17,500)
77–
2,795,475$ (410,957)

Expenditures and others:
Project cost (Note 5)
Exchange loss
Time delay (Reversal) in settling advance payments
Write-off of arrears in contributions
Gain on Securities
Write-off arrears in voluntary contributions
Excess of revenues over expenditures

Thematic Programmes Sub-AccountRevenues:
Voluntary contributions (Notes 2, 3 and 5)
Correction to prior year’s budget
Expenditures and others:
Project cost (Note 5)
Time delay (Reversal) in settling advance payments
Exchange gain and loss, net
Write-off arrears in voluntary contributions
Excess of revenues over expenditures$$

The accompanying notes are an integral part of these financial statements.

3

International Tropical Timber Organization
Special AccountStatements of Changes in Fund Balance
For the years ended December 31

Project Sub-AccountAppropriatedfor specified
projects

UnappropriatedFunds

Surplus fromcompletedprojects

2014
Members’ funds as of January 1, 2014
Excess of revenues over expenditures
Surplus from Completed Projects
Utilization of remaining funds by donors
Adjustment of prior year
Transfer to/from Bali Partnership FundTransfer to/from Executing Agencies AccountMembers’ funds as of December 31, 2014

$ 2,966,475$ (25,195)––(12,084)–
3,686$ 2,932,882$ (1,671,400)$ 471,105–(570,794)–
316,753–$ (1,454,336)$1,646,922$–
96,441(47,976)–
32,015–$ 1,727,401

2015
Excess of revenues over expenditures
Surplus from Completed Projects
Utilization of remaining funds by donors
Reclassification of member’s fund(Note 4)
Adjustment of prior year
Transfer to/from Bali Partnership FundTransfer to/from Executing Agencies AccountMembers’ funds as of December 31, 2015

$ (4,736,087)––(2,869,831)––
4,571,517$ (101,519)$ 184,157–(150,000)
2,869,831–
150,000–$ 1,599,652

–
7,695
–
–
–
–
–
$ 1,735,096$

Thematic Programmes Sub-AccountAppropriatedSurplus fromfor specified Unappropriatedcompletedprojects
funds
projects$$$$

29,017(410,957)––––
401,396
19,456(1,146,387)––(21,831)––
1,144,012$(4,750)$$$(22,043)
–
–
–
–
–
–
(22,043)
$

(114)
–
–
21,831–––$ (327)

Total

$

–
–
–
–
–
–
–
–

$ 2,948,971$ 34,953
96,441(618,770)(12,084)
348,767
405,082$3,203,360

$

–
–
–
–
–
–
–
–

$ (5,698,431)
7,695(150,000)––
150,000
5,715,529$3,228,152$$$

The accompanying notes are an integral part of these financial statements.

4International Tropical Timber Organization
Special AccountStatements of Cash Flows

Excess of revenues over expenditures
Changes in assets and liabilities:
Arrears in voluntary contributions
Accounts receivable from Bali Partnership Fund
Account
Accounts receivable from Executing Agencies Account
Advance to and receivable from staff members andothers
Accounts payable to Bali Partnership Fund Account
Accounts payable to Executing Agencies Account
Accounts payable to staff members and others
Accrued Liabilities
Unappropriated fundReserve for programme support

Year ended December 31,
2015
2014
(U.S. dollars)$(5,690,737)$ 131,394
2,105,391

2,414,207(876,000)(1,415,656)(29,323)-(41,065)
89,280(2,299,063)(6,441)(26,614)(62,648)(211,892)(116,539)(714,167)(33,750)
98,602(1,561,001)
315,601

Changes in members’ funds:
Adjustment of prior year
Utilization of remaining funds by donors
Transfer to/from Executing Agencies AccountTransfer to/from Bali Partnership FundNet increase (decrease) in cash

(150,000)
5,715,529
150,000(2,719,915)(12,084)(618,770)
405,081348,767
628,019

Cash and time deposits at beginning of year
Cash and time deposits at end of year

6,483,087$ 3,763,172

5,855,068$ 6,483,087

The accompanying notes are an integral part of these financial statements.

5

International Tropical Timber Organization
Special AccountNotes to Financial Statements

1. Significant Accounting Policies
See Note 2 to the financial statements of ITTO.
Change in accounting policies
In the 2015 Financial Statements, ITTO adopted an accounting policy change to provide
reliable and more relevant information about the effects of transactions and conditions on its
financial position.
The accounting policy of the previous financial statements (2014 and before) only recognized
expenses arising from funds (i.e., Members’ voluntary contribution under the ITTA) received
or to be received from donors when their payment to the executing agency was processed.
However, by reviewing the arrangement of existing projects, the management reached to theconclusion that the accounting policy was insufficient to provide the full and precise pictureof the liabilities which ITTO has to pay to recipient Members based on its internationalbinding obligations arising from the bilateral Exchange of Notes with a donor country, toundertake programs to implement a part of the country’s development assistance scheme,
which is independent from ordinary projects carried out within the framework of the ITTA.
In this light, the change was introduced to better reflect ITTO’s obligations concerning those
programs, arising from the bilateral Exchange of Notes mentioned above, by which the entire
amount of the unused portion of the funds received by ITTO for this purpose shall berecorded as liabilities.
This change has been applied retrospectively in the Financial Statements. The following
tables show the effect of the changes in previous periods. The effects of the changes before
2014 have been considered impracticable to determine. Consequently, the new accounting
policy has been applied to the opening balance of 2014 of liabilities and each affectedcomponent of equity.

6

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

1. Significant Accounting Policies (continued)
Change in accounting policies (continued)
January 1st, 2014 - special accountPreviously published
AssetsLiabilities and contributions
Members' funds

39,255,028
36,306,057
2,948,971

Change inaccounting policies
000Revised39,255,028
36,306,057
2,948,971

December 31st, 2014 - special account

AssetsLiabilities and contributions
Members' funds

37,614,702
34,411,342
3,203,360

Change inaccounting policies
000Revenues and Expenditures-355,885

487,279

Previously published

Revised37,614,702
34,411,342
3,203,360
131,394

December 31st, 2015 - special account

AssetsLiabilities and contributions
Members' funds

Former accounting
policies
35,122,116
31,893,964
3,228,152

Change inaccounting policies
000Revenues and Expenditures-6,513,143

822,406

Revised35,122,116
31,893,964
3,228,152-5,690,737

7International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

2. Contributions
Cash received for contributions by countries for the years ended December 31, 2015 and 2014
are as follows:
2015
Project Sub-Account:
Received from:
Government of Germany
Government of Japan (F.A.)
Government of Japan (MoFA)
Government of Republic of Korea
Government of China
Government of the Netherlands
Government of U.S.A.
Common Fund for Commodities
APF NetEuropean Commission
Administrative Account - WCA
Private (for other activities)
Thematic Programmes Sub-Account:
Received from:
Government of Japan(F.A.)
Government of The Netherlands
Government of U.S.A.
Total

2014

(U.S. dollars)$

751,683
2,630,380
40,000100,000
250,000
875,000
24,075130,000
1,345,468
350,000
25,089$ 6,521,696

$

$

$

$ 6,521,696

808,031
1,488,887
3,216,690
40,000162,094
777,245
85,0862,478,123
65,000$ 9,121,156

53,875693,204
100,000
847,079$9,968,235

8International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

2. Contributions (continued)
The accumulated balance of cash received for contributions at December 31, 2015 is asfollows:
Received in

Cash Received(U.S. dollars)

1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

$

$

2,015,449
2,359,075
4,512,761
28,552,991
11,367,530
13,657,049
14,777,664
21,532,261
17,384,781
24,458,292
18,137,365
15,122,116
13,417,709
13,054,181
15,721,129
12,433,738
9,601,789
3,250,425
6,449,698
7,296,004
8,352,459
6,687,804
14,675,509
8,825,338
9,767,374
10,213,959
11,637,237
9,968,235
6,521,696
341,751,619

9International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

3. Utilization of Members’ Funds by Donors AccountDuring the year ended December 31, 2015, ITTO utilized members’ funds. The details are as
follows:
Utilization of members’ fund transferred from the Administrative Account:(Project Sub-A/C)

Description
Transfer from Admin. WCA to allocate to
PP-A/51-314
Transfer from Admin. WCA to allocate to
PP-A/51-313

Amount transferred(U.S. dollars)$ 100,000
250,000

Total$350,000

Utilization of remaining funds by donors in the Special Account:(Project Sub-A/C)

Description
Allocation of Unearmarked Funds to
ITTO Fellowship Programme
Total

Amount transferred(U.S. dollars)$$

85,00085,000Utilization of members’ fund transferred from the Bali Partnership Fund:(Project Sub-A/C)

Description
Transfer from BPF Sub-account B toallocate to ITTO Fellowship Programme
Total

Amount transferred(U.S. dollars)$ 150,000$ 150,000

10International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)
3. Utilization of Members’ Funds by Donors Account (continued)
During the year ended December 31, 2014, ITTO utilized members’ funds. The details are as
follows:
Utilization of members’ fund transferred from the Administrative Account:(Project Sub-A/C)

Description
Transfer from Admin. WCA to allocate to
PP-A/50-310
Transfer from Admin. WCA to allocate to
PP-A/50-311
Total

Amount transferred(U.S. dollars)$ 25,000
40,000$65,000

Utilization of remaining funds by donors in the Special Account:(Project Sub-A/C)

Description
Allocation of Unearmarked Funds to
ITTO Fellowship Programme
Allocation of Unearmarked Funds to
PP-A/49-292
Allocation of Unearmarked Funds to
PP-A/50-302
Allocation of Unearmarked Funds to
PP-A/50-307
Total

Amount transferred(U.S. dollars)$ 4,041
100,000
50,000100,000$254,041

11

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)
3. Utilization of Members’ Funds by Donors Account (continued)
Utilization of members’ fund transferred from the Bali Partnership Fund:(Project Sub-A/C)

Description
Transfer from BPF Sub-account B toallocate to ITTO Fellowship ProgrammeTransfer from BPF Sub-account B toallocate to PP-A/48-275
Transfer from BPF Sub-account B toallocate to PP-A/48-280
Transfer from BPF Sub-account B toallocate to PP-A/49-294
Transfer from BPF Sub-account B toallocate to PP-A/50-304
Transfer from BPF Sub-account B toallocate to PP-A/50-306
Total

Amount transferred(U.S. dollars)$ 95,959
65,79490,00020,00020,00025,000$316,753

4. Reclassification in the section of members’ fund
The management decided at the end of 2015 to transfer $ 2,891,662 to UnappropriatedFunds out of the Appropriated funds, which had no commitments to projects/activities,for the
purpose of identifying the amount available in the Unappropriated funds.
This
reclassification was applied to the balance of the accounts as of the end of year of 2015 andreflected in the financial statements of the year of 2015.

12

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

13

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

14

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

15

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

16

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

17

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

18

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

19

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

20

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

21

International Tropical Timber Organization
Special AccountNotes to Financial Statements (continued)

22

Financial Statements of
the Bali Partnership Fund AccountInternational Tropical Timber Organization
December 31, 2015 and 2014

International Tropical Timber Organization
Bali Partnership Fund AccountFinancial Statements

December 31, 2015 and 2014

Contents
Report of Independent Auditors ............................................................................................. 1
Balance Sheets ........................................................................................................................ 2
Statements of Revenues and Expenditures ............................................................................. 3
Statements of Changes in Fund Balance ................................................................................ 4
Statements of Cash Flows ...................................................................................................... 5
Notes to Financial Statements ................................................................................................ 6

International Tropical Timber Organization
Bali Partnership Fund AccountBalance Sheets

December 31,
2015
2014
(U.S. dollars)
AssetsCash and time deposits
Arrears in voluntary contributions (Note 6)
Accounts receivable from Executing Agencies Account
Advances to and receivable from staff members and others
Liabilities and contributions
Accounts payable to Special Account
Accounts payable to staff members and others (Note 1)
Accrued liabilities
Reserve for programme support (Note 1)
Members’ funds
Appropriated for specified projects, pre-projects andactivities (Note 1,5 and 6)
Unappropriated funds (Note 5)
Surplus from completed projects, pre-projects andactivities (Note 1 and 6)
Total Members’ funds

$

5,431
–
30,967,226
7,190$ 30,979,847

$

5,431
–
30,118,766–$30,124,196$ 29,655,921
4,156
1,873
40,49629,702,446$28,869,201
9,381
793
34,691
28,914,066(19,750)

4,283,372

707,549
589,602(3,661,097)
587,856

1,277,402$ 30,979,847

1,210,131$30,124,196

The accompanying notes are an integral part of these statements.

2

International Tropical Timber Organization
Bali Partnership Fund AccountStatements of Revenues and Expenditures

Year ended December 31,
2015
2014
(U.S. dollars)
Revenues:
Voluntary contributions (Notes 1, 2, 4 and 6)
Pledges not received
Interest income (Note 3)
Expenditures and others:
Project cost (Note 6)
Exchange gain and loss
Time delay (Reversal of time delay) in settling advancepayments
Gain on securities, net (Note 3)
Excess of expenditures over revenues––
201,409
201,409$ 122,755(31,802)466,997
557,949

647,138–

443,268
22(14,115)–
633,022$ (431,613)(2,125)(4,142)437,023$ 120,926

The accompanying notes are an integral part of these statements.

3

International Tropical Timber Organization
Bali Partnership Fund AccountStatements of Changes in Fund Balance
For the years ended December 31

Appropriatedfor specified
projects
2014
Member’s funds as of January 1, 2014
Excess of expenditures over revenues
Transfer to surplus from completed projectTransfer to/from Special AccountTransfer to/from Executing Agencies
Account
Members’ funds as of December 31, 2014
2015
Excess of expenditures over revenues
Transfer to surplus from completed project
Reclassification of member’s fund(Note 5)
Transfer to/from Special AccountTransfer to/from Executing Agencies
Account
Members’ funds as of December 31, 2015

Surplus from
Unappropriatedcompletedfunds
projects(U.S. dollars)$ 4,284,790( 358,211)––$(3,815,461)
471,117–(316,753)$ 611,850–
8,020(32,015)356,793$ 4,283,372–$(3,661,097)–$ 587,856$ (634,768)–(4,317,238)–$ 201,409–
4,317,238(150,000)$

648,884$ (19,750)–$ 707,549–$ 589,602

–
1,746
–
–

Total

$

1,081,179
112,906
8,020(348,767)
356,793$ 1,210,131$(433,159)
1,746–(150,000)
648,884$ 1,277,402

The accompanying notes are an integral part of these statements.

4International Tropical Timber Organization
Bali Partnership Fund AccountStatements of Cash Flows

Excess of expenditures over revenues

Year ended December 31,
2015
2014
(U.S. dollars)$ (431,613)$ 120,926

Changes in assets and liabilities:
Arrears in contributions
Accounts Receivable from Executing Agencies Account
Advance to and received from staff members and others
Accounts Payable to Special Account
Accounts Payable to staff members and others
Accrued Liabilities
Reserve for programme support–(848,460)(7,190)786,720(5,225)
1,080
5,805

631,802(825,644)–
29,323
2,175–
33,392

Changes in members’ funds:
Transfer to/from Executing Agencies AccountTransfer to/from Special AccountNet increase (decrease) in cash

648,884(150,000)
1

356,793(348,767)
1

5,431
5,431

5,430
5,431

Cash and time deposits at beginning of year
Cash and time deposits at end of year$$

The accompanying notes are an integral part of these statements.

5

International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements

1. Significant Accounting Policies
See Note 2 to the financial statements of ITTO.
2. Contributions
There were no Cash received in respect to contributions from countries for the years ended
December 31, 2015.
Cash received for contributions by countries for the years ended December 31, 2014 are as
follows:
2014(U.S. dollars)
Received from:
Government of China
Government of Japan (MoFA)
Government of U.S.A.

$$

100,000
600,000
22,755
722,755

The accumulated balance of cash received and transfers from the Special Account forcontributions at December 31, 2015 are as follows:
Transfer from
Net contribution
Received in
Cash received
Special Accountreceived(U.S. dollars)
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

$ 100,000
1,125,000
100,000–
709,642
709,262130,000
140,000
1,480,000
76,444
2,993
117,649–––
722,755–$5,413,745$ 2,111,185
2,542,201
4,016,671
16,753,972
140,000
1,194,600
2,848,315
682,360
85,940544,195
50,000250,000
439,176
177,158
31,132––$31,866,905$ 2,211,185
3,667,201
4,116,671
16,753,972
849,642
1,903,862
2,978,315
822,360
1,565,940
620,639
52,993367,649
439,176
177,158
31,132
722,755–$37,280,650

6International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements (continued)

3. Interest Income
For financial Bali Partnership Fund, 50 percent of interest earned as a result of activities
related to Special Account is attributable to the Bali Partnership Fund. Interest income,insurance fee and redemption fee, net includes those incurred in the Special Account in theamount of $199,577 for 2015 and $468,802 for 2014.

7

International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements (continued)

4. Utilization of Members’ Funds
During the year ended December 31, 2015, ITTO utilized members’ funds. The details are as
follows:
Utilization of members’ fund transferred from the Bali Partnership Fund to the Project
Sub-Account:
Description

Amount transferred(U.S. dollars)

Transfer from BPF Sub-account B to allocate to
ITTO Fellowship Programme$ 150,000

Total$ 150,000

During the year ended December 31, 2014, ITTO utilized members’ funds. The details are as
follows:
Utilization of members’ fund transferred from the Bali Partnership Fund to the Project
Sub-Account:
Description
Transfer from BPF Sub-account B to allocate to
ITTO Fellowship ProgrammeTransfer from BPF Sub-account B to allocate to
PP-A/48-275
Transfer from BPF Sub-account B to allocate to
PP-A/48-280
Transfer from BPF Sub-account B to allocate to
PP-A/49-294
Transfer from BPF Sub-account B to allocate to
PP-A/50-304
Transfer from BPF Sub-account B to allocate to
PP-A/50-306
Total

Amount transferred(U.S. dollars)$ 95,959
65,79490,00020,00020,00025,000$316,753

8

International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements (continued)

5. Reclassification in the section of members’ fund
The management decided at the end of 2015 to transfer $4,317,238 to UnappropriatedFunds out of the Appropriated funds, which had no commitments to projects/activities,for the
purpose of identifying the amount available in the Unappropriated funds.
This
reclassification was applied to the balance of the accounts as of the end of year of 2015 andreflected in the financial statements of the year of 2015.

9International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements

10International Tropical Timber Organization
Bali Partnership Fund AccountNotes to Financial Statements (continued)

11

Financial Statements ofthe Executing Agencies AccountInternational Tropical Timber Organization
December 31, 2015 and 2014

International Tropical Timber Organization
Executing Agencies AccountFinancial Statements

December 31, 2015 and 2014

Contents
Report of Independent Auditors ............................................................................................. 1
Balance Sheets ........................................................................................................................ 2
Statements of Revenues and Expenditures ............................................................................. 3
Statements of Changes in Fund Balance ................................................................................ 4
Statements of Cash Flows ...................................................................................................... 5
Notes to Financial Statements ................................................................................................ 6

International Tropical Timber Organization
Executing Agencies AccountBalance Sheets

December 31,
2015
2014
(U.S. dollars)
AssetsCash and time deposits
Net of Investments in securities
Investments in securities(Note 1)
Less: Provision for Impairment of Investment in securities

Accounts Receivable from Special AccountAccrued revenue
Liabilities and contributions
Liabilities arising from Exchange of Notes
Accounts payable to Bali Partnership Fund AccountMembers’ funds
Funds committed for specified projects of Special Accountand Bali Partnership Fund Account(Note 2)
Impairment of Investments in securities
Provision for Impairment of Investment in securities$

6,116,337-$ 8,115,753
12,200,000

12,014,000(12,014,000)

12,200,000-

26,575,437$ 32,691,774

30,290,156
438,098$ 51,044,007

3,419,632
30,967,226
34,386,858

4,241,912
30,118,766
34,360,678

16,286,461

22,650,875(5,967,546)(12,014,000)(1,695,084)$ 32,691,774(5,967,546)
16,683,329$ 51,044,007

The accompanying notes are an integral part of these statements.

2

International Tropical Timber Organization
Executing Agencies AccountStatements of Revenues and Expenditures

Year ended December 31,
2015
2014
(U.S. dollars)
Revenues:
Interest income (Note 3)
Other income

Expenditures and others:
Financial Fee (Note 3)
Transfer of interest to Special Account andBali Partnership Fund Account (Note 3)
Gain on securities (Note 3)
Increase in Provision for Impairment of Investment insecurities
Excess of revenues over expenditures$

675,258-$

929,319
32,454675,258

961,773

276,105-

399,153

937,603-(8,284)12,014,000
12,689,258$ (12,014,000)

929,319
32,454$

The accompanying notes are an integral part of these statements.

3

International Tropical Timber Organization
Executing Agencies AccountStatements of Changes in Fund Balance
For the years ended December 31(U.S. dollars)
2014
Members’ funds as of January 1, 2014
Transfer of funds committed for specified projects to Special AccountTransfer of funds committed for specified projects toBali Partnership Fund AccountExcess of revenues over expenditures
Members’ funds as of December 31, 2014

2015
Transfer of funds committed for specified projects to Special AccountTransfer of funds committed for specified projects toBali Partnership Fund AccountExcess of revenues over expenditures
Members’ funds as of December 31, 2015

$17,412,748(405,082)(356,793)
32,454$16,683,329$ (5,715,529)(648,884)(12,014,000)$ (1,695,084)

The accompanying notes are an integral part of these statements.

4International Tropical Timber Organization
Executing Agencies AccountStatements of Cash Flows

Year ended December 31,
2015
2014
(U.S. dollars)
Excess of revenues over expenditures
Changes in assets and liabilities:
Advances to Special Account
Account payable to Bali Partnership Fund AccountInvestments in securities
Provision for Impairment of Investment in securities
Liabilities arising from Exchange of Notes
Investments in securities
Accrued revenue
Impairment of Investments in securities$ (12,014,000)$

32,454

3,714,719
848,460
186,000
12,014,000(822,280)
438,098-

714,167
825,644(487,279)(1,959,899)(264,012)-

Changes in members’ funds:
Transfer to/from Special Account and Bali Partnership
Fund AccountNet decrease in cash

(6,364,413)(761,874)(1,999,417)(1,900,798)

Cash and time deposits at beginning of year
Cash and time deposits at end of year

8,115,753$ 6,116,337

10,016,552$ 8,115,753

The accompanying notes are an integral part of these statements.

5

International Tropical Timber Organization
Executing Agencies AccountNotes to Financial Statements

1.

Significant Accounting Policies

See Note 2 to the financial statements of ITTO.
Change in accounting policies
In the 2015 Financial Statements, ITTO adopted an accounting policy change to provide
reliable and more relevant information about the effects of transactions and conditions on its
financial position.
The accounting policy of the previous financial statements (2014 and before) only recognized
expenses arising from funds (i.e., Members’ voluntary contribution under the ITTA) received
or to be received from donors when their payment to the executing agency was processed.
However, by reviewing the arrangement of existing projects, the management reached to theconclusion that the accounting policy was insufficient to provide the full and precise pictureof the liabilities which ITTO has to pay to recipient Members based on its internationalbinding obligations arising from the bilateral Exchange of Notes with a donor country, toundertake programs to implement a part of the country’s development assistance scheme,
which is independent from ordinary projects carried out within the framework of the ITTA.
In this light, the change was introduced to better reflect ITTO’s obligations concerning those
programs, arising from the bilateral Exchange of Notes mentioned above, by which the entire
amount of the unused portion of the funds received by ITTO for this purpose shall berecorded as liabilities.
This change has been applied retrospectively in the Financial Statements. The following
tables show the effect of the changes in previous periods. The effects of the changes before
2014 have been considered impracticable to determine. Consequently, the new accounting
policy has been applied to the opening balance of 2014 of liabilities and each affectedcomponent of equity.

6

1. Significant Accounting Policies (continued)
Change in accounting policies (continued)
January 1st, 2014 - executing agencies acc.
Previously
Change inpublishedaccounting policies
AssetsLiabilities and contributions
Members' funds

51,435,061
29,293,122
22,141,940

Revised04,729,192-4,729,192

51,435,061
34,022,314
17,412,748

December 31st, 2014 - executing agencies acc.
Previously
Change inpublishedaccounting policies
AssetsLiabilities and contributions
Members' funds

51,044,007
30,118,766
20,925,241

Revenues and Expenditures

32,4540
4,241,912-4,241,912

Revised51,044,007
34,360,678
16,683,329
32,454

December 31st, 2015 - executing agencies acc.
Former accounting
Change inpolicies
accounting policies

RevisedAssetsLiabilities and contributions
Members' funds

32,691,774
30,967,351
1,724,423

03,419,507-3,419,507

32,691,774
34,386,858-1,695,084

Revenues and Expenditures-12,014,0000-12,014,000

2.

Funds Committed for Specified Projects

The funds committed for specified projects of the Project Sub-Account, Thematic
Programmes Sub-Account and the Bali Partnership Fund are composed as below.
December 31,
2014
Project Sub-AccountThematic Programmes
Special Account Total
Bali Partnership Fund Account
Total
Impairment of Investments insecurities
Provision for Impairment of
Investments in securities
Total

Movement(U.S. dollars)

December 31,
2015$17,115,608
3,848,778
20,964,386
1,686,487
22,650,875$ (4,571,517)(1,144,012)(5,715,529)(648,884)(6,364,413)$12,544,091
2,704,766
15,248,857
1,037,604
16,286,461(5,967,546)-(5,967,546)$16,683,329(12,014,000)$ (18,378,412)(12,014,000)$(1,695,084)7

2. Funds Committed for Specified Projects (continued)
These amounts are included under the heading “Appropriated for future expenditures at
December 31, 2015” of “Note 5 Detail of Project Status” in the respective financial
statements of Special Account” and “Note 6 Detail of Project Status” in those of Bali
Partnership Fund Account.
3. Interest income
In accordance with the Decision 3 (XXXV) of ITTC, 50 percent of Interest income, insurance
fee and redemption fee, net earned, $199,577(*1) was transferred to both the Special Accountand the Bali Partnership Fund Account for the year ended December 31, 2015 while $468,802
was transferred to both accounts for the year ended December 31, 2014.
(*1)
Interest income
Insurance Fee
Redemption Fee
Total
Transferred to ;Special AccountBali Partnership Fund
Account

4.

$675,258(90,105)(186,000)$
399,153$

199,577
199,577

Significant subsequent events

Provision for Impairment of Investment in securities
USD 12,014,000 of the provision was provided on the balance of the investment in ArdentFund. On 26th April, 2016, Blackstar Capital Star Limited, the solo owner of Ardent Harmony
Inc. presented a petition of voluntary liquidation to the Grand Court of the Cayman Island andthe court issued a supervision order that the liquidation of Ardent Harmony Inc be continued.
The management received an official report from the liquidator dated on 20th June, 2016.
Based on the content regarding the residual assets, the management estimated collectible
amount from the investment, which includes a claim for a legal cost against ITTO injunction.

8