GREENPEACE MEDITERRANEAN FOUNDATION FINANCIAL STATEMENTS FOR December 2007

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1 FINANCIAL STATEMENTS FOR 31 December Greenpeace Mediterranean Foundation was founded in The Foundation is a non-profit foundation in accordance with Maltese Law. As of 31 January 2003 Greenpeace Mediterranean Foundation is exempted from income tax by virtue of the powers vested by Article 12 (2) of the Income Tax Act (Cap.123).

2 DIRECTOR S REPORT The Executive Director submits his annual report and the audited financial statements of the Foundation for the year ended 31 December. Principal activity The Foundation s principal activity is the organization of campaigns to prevent environmental abuse and increase the public s awareness of environmental issues. The Foundation primarily deals with environmental issues in the East Mediterranean Region. The foundation is funded through subscriptions, donations and other fundraising activities. Review of the Foundation s financial operations The Greenpeace Mediterranean Foundation s financial statements for the year show a surplus of 53,677 ( : a deficit of 168,035). The Foundation continues in its resolve to recruit more supporters and therefore increase the amount of funding available in order to continue and increase the environmental campaigns operating throughout the Mediterranean. Statement of Executive Director s responsibilities The Executive Director is responsible for the task of preparing financial statements for each financial year which give a true and fair view of the state of affairs of the Foundation as at the end of the financial year and of the surplus or deficit for the financial year. In preparing the financial statements, the Executive Director is required to ensure that:- Appropriate accounting policies have been consistently applied and supported by reasonable and prudent judgment and estimates; The financial statements have been drawn up in accordance with International Financial Reporting Standards; The financial statements are prepared on the basis that the Foundation must be presumed to be carrying on its activities as a going concern; and Account has been taken of income and charges relating to the accounting period, irrespective of the date of receipt or payment. The Executive Director is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Foundation. The Executive Director is also responsible for safeguarding the assets of the Foundation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditors Net Denetim Yeminli Mali Musavirlik Ltd. Sti. have been appointed as auditors. The report was approved and signed by: Omer F. Ozveren Finance and Organizational Support Director 21 March 2008

3 REPORT OF THE AUDITORS To the Supervisory Board of Greenpeace Mediterranean Foundation We have audited the financial statements of Greenpeace Mediterranean Foundation for the year ended 31 December, which comprise the income and expenditure account, balance sheet, statement of changes in equity, cash flow statement and the related notes. The Executive Director is responsible for the preparation of the financial statements. Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates and judgments made by the Executive Director, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements give a true and fair view of the financial position of the Foundation as of 31 December and of the results of its operations and its cash flows for the year then ended and have been properly prepared in accordance with International Financial Reporting Standards. Without qualifying our opinion we draw attention to note 1 to the financial statements which states that these financial statements have been drawn up on a going concern basis which assumes that the Foundation will continue to have the on-going support of the Stichting Greenpeace Council for the foreseeable future. This copy of the audit report has been signed by Argun Ozdemir (Partner) for and on behalf of Net Denetim Yeminli Mali Musavirlik Ltd. Sti. Certified Public Accountants 21 March 2008

4 INCOME AND EXPENDITURE ACCOUNT Notes INCOME Grants from Greenpeace organizations 542, ,804 Subscriptions, donations and income from fund raising events 1,146,100 1,070,649 Other income ,375 1,688,888 1,453,829 EXPENDITURE (1,633,441) (1,620,076) SURPLUS/(DEFICIT) ON ORDINARY ACTIVITIES 3 55,447 (166,247) Net interest (payable)/receivable 4 (1,770) (1,788) SURPLUS (DEFICIT) FOR THE YEAR 53,677 (168,035) The accounting policies and explanatory form an integral part of the financial statements.

5 BALANCE SHEET As at 31 December Notes ASSETS Fixed assets Tangible assets 6 11,507 16,734 Financial asset ,727 16,954 Current assets Debtors and prepayments 8 79,752 93,296 Cash at bank and in hand 63, , , ,605 TOTAL ASSETS 154, ,559 FUND BALANCE AND LIABILITIES Fund balance Accumulated fund 9 (221,383) (275,057) Creditors: Amounts falling due after more than one year Loans and borrowings 10 10, ,509 Creditors: Amounts falling due within one year Loans and borrowings 10-42,003 Other creditors and accruals , , , ,107 TOTAL LIABILITIES 376, ,616 TOTAL FUND BALANCE AND LIABILITIES 154, ,559 The accounting policies and explanatory notes form an integral part of the financial statements. The financial statements on have been authorised for issue by the Executive Director on 21 March 2008.

6 STATEMENT OF CHANGES IN EQUITY FINANCIAL YEAR ENDED 31 DECEMBER Accumulated Fund Balance at 1 January (107,025) Deficit for the financial year (168,035) Balance at 31 December (275,060) FINANCIAL YEAR ENDED 31 DECEMBER Balance at 1 January (275,060) Surplus for the financial year 53,677 Balance at 31 December (221,383) The accounting policies and explanatory form an integral part of the financial statements.

7 CASH FLOW STATEMENT Cash flows from operating activities Surplus/(deficit) for the year before taxation 53,677 (168,035) Adjustments for: Depreciation of tangible fixed assets 12,575 13,159 Interest receivable (1,652) (757) Interest payable 3,422 2,543 Surplus/(deficit) before working capital changes 68,022 (153,090) Decrease in debtors 9,562 20,523 (Decrease)/increase in creditors (259,452) 219,271 NET CASH GENERATED FROM OPERATING ACTIVITIES (181,868) 86,705 Cash flows from investing activities Purchase of tangible fixed assets (7,348) (16,251) Increase/(decrease) in amount due from group companies (3,982) 23,509 Interest received 1, Interest paid (3,422) (2,543) NET CASH GENERATED FROM/(USED IN) INVESTING ACTIVITIES (13,100) 5,472 Cash flows from financing activities Loan from related parties - 21,692 NET INCREASE IN CASH AND CASH EQUIVALENTS (194,968) 113,870 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 258, ,439 CASH AND CASH EQUIVALENTS AT END OF YEAR 63, ,309 The accounting policies and explanatory form an integral part of the financial statements.

8 NOTES TO THE FINANCIAL STATEMENTS 1. GOING CONCERN During the year ended 31 December, the Foundation registered a surplus of 53,677(: a deficit of 168,035) and as at that date its total liabilities exceeded its total assets by 376,143 (: 643,616). Stichting Greenpeace Council have informed the Foundation that it is their resent intention to continue to finance and support the continued operations of the Foundation. The financial statements have therefore been drawn up on a going concern basis which assumes that Stichting Greenpeace Council will continue to provide support to the Foundation for the foreseeable future. 2. ACCOUNTING POLICIES Accounting convention and basis of preparation The financial statements are prepared under the historical cost convention and comply with International Financial Reporting Standards. In common with voluntary organisations of similar size and nature, the Foundation derives a proportion of its income from voluntary donations, which cannot be fully controlled until they are entered in the accounting records of the Foundation. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Foundation and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Subscriptions, donations and income from fund-raising events Income is accounted for in the year to which it relates. Owing to the nature of the Foundation s activities, income is only recognised to the extent that it is received since this cannot be estimated with any degree of certainty. Interest income Revenue is recognised as the interest accrues, unless collection is in doubt. Expenditure All expenditure relating to current year income or activities, which is accounted for on accruals basis is written off to the Income and Expenditure Account. Tangible fixed assets Tangible fixed assets are stated at historical cost less accumulated depreciation. Depreciation is calculated to write off the cost of tangible fixed assets, on a straight line basis, over the expected useful lives of the assets concerned. The annual rates used for this purpose, which are consistent with those of the previous year, are: % Furniture and fittings Office and other equipment 33.33

9 NOTES TO THE FINANCIAL STATEMENTS continued 2. ACCOUNTING POLICIES continued Financial asset The financial asset, which represents a long term unquoted investment in a subsidiary company, is shown at cost. Provision is only made, where in the opinion of the Executive Director, there is a permanent diminution in value. Where there has been a permanent diminution in the value of the investment, this is recognized as an expense in the period in which the diminution is identified. Borrowing costs Borrowing costs are recognized as an expense in the period in which they are incurred. Foreign currencies Transactions in foreign currencies have been converted into Euros at the rates of exchange ruling on the date of the transaction. Assets and liabilities denominated in foreign currencies have been translated into Euros at the rates of exchange ruling at the balance sheet date. All resulting differences are taken to the profit and loss account. The Foundation changed its reporting currency to Euros at the beginning of. All balances have been restated in Euros at the closing rate of, the income and expense items relating to have been converted into Euros using the average exchange rate and any resulting differences have been picked up in Fund Balance. 3. SURPLUS/(DEFICIT) ON ORDINARY ACTIVITIES The surplus/(deficit) on ordinary activities is stated after charging:- Auditors remuneration 5,000 3,650 Depreciation of tangible fixed assets 12,575 13,159 Differences on foreign exchange 2,028 6, NET INTEREST (PAYABLE)/RECEIVABLE Interest payable on bank balances (279) (197) Interest payable on FIF loan (3,143) (2,346) Interest receivable on bank balances 1, (1,770) (1,786) 5. TAXATION As of 31 January 2003 Greenpeace Mediterranean Foundation is exempted from income tax by virtue of the powers vested by Article 12 (2) of the Income Tax Act (Cap.123).

10 NOTES TO THE FINANCIAL STATEMENTS continued 6. TANGIBLE FIXED ASSETS Furniture And fittings Office & other Equipment Total Year ended 31 December Opening net book amount - 16,734 16,734 Additions - 7,348 7,348 Depreciation charge for the year - (12,575) (12,575) Assets written off Depreciation released on write off At 31 December - 11,507 11,507 At 31 December Cost 70,663 70,663 Accumulated depreciation - (53,929) (53,929) - 16,734 16,734 Net book amount 7. FINANCIAL ASSET Investment in subsidiary company at cost At 31 December This amount represents a 100% shareholding (20% paid up) in the ordinary share capital of Shanti Holdings Limited, a company registered in Malta, with its registered address at Manol Mansions No 6, De Paule Avenue, Balzan, Malta. 8. DEBTORS AND PREPAYMENTS Other debtors 816 7,825 Prepayments - 8,203 Amount due from related companies 52,321 56,303 Amount due from Greenpeace staff 26, ,752 93,296 The amounts due from Greenpeace organizations and from related companies are unsecured, interest free and repayable on demand.

11 NOTES TO THE FINANCIAL STATEMENTS continued 9. ACCUMULATED FUND The accumulated fund represents accumulated deficits. 10. LOANS AND BORROWINGS At 31 December, short term and long term loans and borrowings were as follows: Short term borrowings Loan from Fundraising Investment Fund (FIF) Committee (note i) 10,002 42,003 Long term borrowings Loan from Fundraising Investing Fund (FIF) Committee (note i) - 22,000 Loan from Stichting Greenpeace Council (note ii) - 189,509 At 31 December - 211,509 i. As at 31 December, the loan balance represents the outstanding balance on the 75,000 FIF loan which is unsecured and fully repayable in June 2008 and carries interest at 3%. During the year, 43,049 on the balances of FIF loans was written-off and 17,933 was transferred to current account with Stitching Greenpeace Council. ii. As part of the ODP Agreement, Stitching Greenpeace Council agreed to write-off this loan, which was unsecured and interest free, if certain conditions were met during the year. At 28 November, GPI certified that all conditions were met and therefore the loan was written-off. 11. OTHER CREDITORS AND ACCRUALS Amounts owed to Greenpeace Organisations 30,572 29,792 Amounts owed to Stichting Greenpeace Council 31,852 30,463 Amounts owed to related companies 29,718 10,568 Amounts owed to Greenpeace Staff 9,464 16,059 Accruals 185, ,758 Other creditors 78,854 75, , ,104 The amounts owed to Stichting Greenpeace Council and to Greenpeace organisations are unsecured and interest free. On 6 December, The Foundation received a donation amounting to USD280,000 to be used in Oceans Campaign in Lebanon. In, expenditures made for the Oceans Campaign amounted to 92,435.

12 NOTES TO THE FINANCIAL STATEMENTS continued 12. FINANCIAL INSTRUMENTS At the year-end, the Foundation s main financial assets on the balance sheet comprise of cash at bank and on hand. At the year-end, there were no off-balance sheet financial assets. At the year-end, the Foundation s main financial liabilities on the balance sheet consisted of a long term loan from Stichting Greenpeace Council, other creditors and accruals. At the year-end, there were no offbalance sheet financial liabilities. a. Timing of cash flows The presentation of the financial assets and liabilities listed above under the current and non-current headings within the balance sheet is intended to indicate the timing in which cash-flows will arise b. Credit risk Financial assets which potentially subject the Foundation to concentrations of credit risk consist principally of cash at bank. The Foundation s cash at bank is placed with quality financial institutions, c. Fair values At 31 December and the carrying amounts of cash at bank, debtors, creditors and accrued expenses approximated their fair values. d. Interest rate risks The value of the Foundation s assets and liabilities are not subject to interest rate movements. 13. FOUNDATION STRUCTURE Greenpeace Mediterranean Foundation forms part of Greenpeace International. Greenpeace International is a Foundation incorporated under Dutch Law.