RIPE NCC
Financial Report 1998
Table of contents
Letter from the General Manager 1
Balance Sheet 2
Statement of Income and Expenditures 4
Notes to the Balance Sheet 5
Notes to the Statement of Income and 8
Expenditures
Auditor's Report 9
Amsterdam, March 10, 1999
Letter from the General Manager
The last year has been a transition year for the RIPE NCC. Although 1998
marked the seventh year of RIPE NCC operations it was also the first year of
its existence as an independent association.
During this year the membership has grown by more than one third to 1,263
members from 76 countries. The membership has continued to take an active
interest and participation in the various RIPE working groups that provide
guidance to NCC operations. The general meeting of the association saw
constructive discussion and strong support for the association and its
board.
The staff has grown to 50 people, a very international group of 18
nationalities and a high level of professional expertise. They have
continued to provide the membership with professional services in an
impeccably neutral and impartial way.
We close 1998 in a healthy financial position that provides the stability
that is expected by the membership.
For 1999 we expect that membership growth will be comparable to 1998.
Current services will continue and the test traffic project will turn into a
service. We will also have to do our part in the formalisation of Internet
administrative structures, most notably the structure of global policy
development regarding address space and related identifiers.
For more details about 1998 please refer to the 1998 RIPE NCC Annual Report
published in April. It can be found on our web site at http://www.ripe.net/.
If you have any further questions, please do not hesitate to contact us.
Kind regards
Daniel Karrenberg
General Manager
BALANCE SHEET (in k XEU)
ASSETS
Fixed assets 31.12.1998 31.12.1997
Infrastructure 448 416
Computers 200 0
Office furniture 74 0
722 416
Long term
receivable 60 0
Current assets
Receivables 2.745 1.769
Prepayments,
accrued income
and
miscellaneous
receivables 72 34
TERENA current
account 0 -12
2.817 1.791
Cash in bank and
on hand 1.576 809
5.175 3.016
BALANCE SHEET (in k XEU)
LIABILITIES
Capital 31.12.1998 31.12.1997
Reserves 477 983
Net surplus -506
Clearinghouse 732
1.209 477
Current
liabilities
Creditors 169 58
1998/9
Invoices
issued 3.186 2.130
VAT -11 16
Personnel
fund 368 215
Miscellaneous
payables 253 120
CENTR project 1 0
payable
3.966 2.539
5.175 3.016
STATEMENT OF INCOME AND EXPENDITURES (in k XEU)
1998 1997
INCOME
Fees 3,996 2,244
Other income 95 19
Total income 4,091 2,263
EXPENDITURE
Operating costs 2,678 2,093
Depreciation 249 52
2,927 2,145
Total expenses
Surplus before
miscellaneous
costs 1,164 118
Miscellaneous
costs
Doubtful
debtors/Credit
notes 322 245
Personnel fund 152 315
Moving expense 0 60
Total
miscellaneous
costs 474 620
Financial
expenses
Bank interest -29 -9
Exchange rate
differences -28 5
Banking
expenses 15 8
Total financial
expenses -42 4
NET SURPLUS 732 -506
Notes to the balance sheet as per December 31, 1998 of the RIPE NCC
GENERAL INFORMATION
All amounts are expressed in XEU. The principle foreign currency, the
Dutch guilder, was converted at a rate of .453 for the year. On December
31, 1998 the XEU was replaced by the EUR using the same rate. Historic
cost was used throughout unless otherwise stated.
Some figures from 1997 have been restated to correspond with the slightly
modified presentation in 1998.
FIXED ASSETS
12/31/98 12/31/97
Infrastructure
Purchase costs 699 468
Less: Depreciation -251 -52
Book value 31-12 448 416
Computers
Purchase costs 244 0
Less: Depreciation -44 0
Book value 31-12 200 0
Office Furniture &
Equipment
Purchase costs 80 0
Less: Depreciation -6 0
Book value 31-12 74 0
Total Fixed Assets at
book value 722 416
Assets are valued at historical cost and are depreciated on a
straight-line basis, starting in the month after acquisition.
Infrastructure and computers are written off in three years, office
furniture and equipment in five. All items under 1,000 XEU are expensed.
LONG TERM RECEIVABLE
The long term receivable consists of the contribution of the owner of the
building towards the renovation costs of that building. The entire amount
of 175,300 NLG (79,275 XEU) was used to reduce the value of the
infrastructure assets.
CURRENT ASSETS
12/31/98 12/31/97
Receivables
Receivables 31 December 3,270 2,014
Less: Bad debts/Credit
notes -525 -245
2,745 1,769
The doubtful debts includes amounts that were erroneously invoiced to
members in 1997 and 1998 who were no longer in business.
12/31/98 12/31/97
Prepayments &
miscellaneous 24 32
receivables
Prepayments, accrued 48 2
income, etc.
72 34
CAPITAL
The Reserves are the accumulated surpluses of previous years. They are not
earmarked for any specific purpose.
The surplus of 1998 has been allocated to the Clearinghouse by a decision
of the Executive Board. This amount may be redistributed to members if so
decided by the Executive Board. The tax ruling between the RIPE NCC and
the Dutch tax authorities allows the RIPE NCC to accumulate up to a
maximum of three times the members' annual contributions in the
Clearinghouse account. This was the first year of operation for the
Clearinghouse.
CURRENT LIABILITIES
1998/9 Invoices issued
1998/9 Invoices issued consists of invoices sent in the current calendar
year but pertaining to the following accounting year. This will be
recognised as income during the next accounting year.
Personnel Fund
The Personnel Fund expense was calculated using the number of people with
employment contracts of indeterminate time working at the RIPE NCC as at
December 31, 1998. The amount includes allowances for vacation pay, the
pension and year end payment as well as the employer's part of social
premiums payable. The 1998 contribution to the fund was 152,232 XEU.
Miscellaneous payables 12/31/98 12/31/97
Accruals 34 83
Social premiums, wage 155 0
taxes payable
Health insurance,
accrued vacation, etc. 64 37
253 120
CENTR Project 12/31/98 12/31/97
Total invoiced 83 0
Total expenses -82 0
Total payable to
CENTR 1 0
The RIPE NCC has agreed to support the CENTR project until June 1999 at
the latest. At that time, any difference between what has been invoiced
and the expenses incurred will be paid to/by CENTR. As at December 31,
1998 the RIPE NCC had invoiced 1,421 XEU more than had been spent.
ITEMS NOT SHOWN ON BALANCE SHEET
The RIPE NCC rents office space in two buildings and has two separate rental
agreements for these. One contract runs from January 1, 1997 for a period of
five years. This contract will be automatically renewed for a further five
years if notice of intent to vacate has not been given to the owner. The
other contract runs from December 1, 1997 for a period of five years with a
renewal option of an additional five years.
Two bank guarantees have been issued, both to cover the rent of the
Amsterdam office space. The guarantees are valid for the length of the lease
agreements plus three months.
The second rental agreement has a provision for a contribution from the
building's owner towards the renovation costs. Discussions are underway with
the lessor to determine what the amount will be. The entire amount of the
contribution will be used to reduce the value of the infrastructure assets.
Notes to the Statement of Income and Expenditure of RIPE NCC
All amounts are expressed in XEU. The principle foreign currency, the Dutch
guilder, was converted at a rate of .453 for the year. On December 31, 1998
the XEU was replaced by the EUR using the same rate.
The RIPE NCC had 53 employees as at December 31, 1998. Along with temporary
personal, this re-presents 49.9 FTE's (Full Time Equivalent). Salary and
related costs account for more than 60% of Total Expenses.
Revenues are higher than were budgeted because the number of MEDIUM and
LARGE Local Internet Registries (LIR) was higher than estimated. Interest
revenues come from short-term deposits of working capital. Other income is
primarily the RIPE meeting plus service charges and interest on outstanding
accounts receivable.
The number of LIR's has continued to grow at approximately one per calendar
day. At the end of 1998 there were 1,263 Local Internet Registries as
compared to 905 in 1997.
The Doubtful Debtors expense will clear out all outstanding debts for all
previous years and a large part of 1998 thought to be uncollectible. Any
debtors whose debt has been written off will first have to pay all existing
debts, a new sign-up fee as well as the annual fee in advance if they wish
to use the RIPE NCC services in the future. A debt collection policy has
been implemented in the second half of 1998 and it is expected that this
amount will be reduced to the budgeted amount in the future.
The Personnel Fund expense was calculated using the number of people with
employment contracts of indeterminate time working at the RIPE NCC as at
December 31, 1998. The amount includes allowances for vacation pay, the
pension and year end payment as well as the employer's part of social
premiums payable.
To the General Meeting and
Executive Board of
RIPE NCC Association
Singel 258
1016 AB AMSTERDAM
AUDITOR'S REPORT
Introduction
We have autited the 1998 financial statements fo Reseauz IP Europeens
Network Co-ordination Centre (RIPE NCC). These financial statements are the
responsibility of the management f the association. Our responsibility is to
express an opnion on these financial statements based on our audit.
Scope
We conducted our audit in accordance with audition standards generally
accepted in the Netherlands. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accointing
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe tat our
audit provides a reasonable basis for our opinion.
Opinion
In our opinion the financial statements give a true and fair view of the
financial position of the association as at 31 December 1998 and of the
result for the year ended in accordance with accounting principles generally
accepted in the Netherlands.
Amsterdam, March 10, 1999
M.H.P. van Winsen
Registeraccountant