Banking details account Name: SA Red Cross Air Mercy Service Trust account Number: bank: Nedbank branch code:

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1 ( THINK MEDICAL ASSISTANCE ) A Eurocopter helicopter is a flying life support system for paramedics and rescue services. Always on call to reach casualties of accidents and disasters or evacuate critical care patients. Prescribe an EC145. Thinking without limits AMS 2013 AR FIN update.indd EC-EMS-AD-210x297.indd /09/02 AM 28/03/139:40 18:06

2 TRIbuTe TO volunteers Photo Credit: Independent Newspaper Our heartfelt thanks to our committed volunteers pilots, paramedics, doctors, nurses, healthcare professionals and rescue crew. Thank you for your dedication and support in helping us contribute to the improvement in the quality of life of all communities. We thank you and your families for giving us your most precious asset your time. You are truly valued. We trust that you will continue to assist us to facilitate access to equitable and effective healthcare to all communities in need. Make a Difference While most of the operational costs are recovered from provincial departments of health and other associated medial aid organisations, the expansion and development of AMS relies heavily of corporate and public donations. These donations, whether in kind or financial are crucial for purchasing medical and aviation equipment and developing infrastructure and services. There are various ways of donating, ranging from monthly donations to once off annual contributions. Individuals can also donate by leaving a bequest or legacy in their will. Corporates are encouraged to include the AMS in their Corporate Social Investment Programmes. Naming rights are available depending on the size of donation as well as a Section 18A tax certificate for donations received. Banking details account Name: SA Red Cross Air Mercy Service Trust account Number: bank: Nedbank branch code: Thank you for your donation that will be contributed towards provide healthcare to impoverished communities. 30

3 IN appreciation Our sincere gratitude to the following organisations and individuals for the support and wonderful generosity to the AMS. Your support is valued and much appreciated. R1million and above ACSA ATNS R and above Anglo American Chairman s Fund ACSA ACSA KSIA R R and above Investec Charitable Trust Ramgoolam & Associates Dennis Jankelow & Associates Jordaan Family F. Lockhard AgustaWestland Eurocopter R R5 000 and above L Visser Y Ferreira Papilky & Winner Educate Gifts in kind Newsclip Media Monitoring Service ImageSA : Roger Sedres Katanga Executive Parking Cellect Cellular Irene McCullagh Photography Paul Job Red Bull South Africa Dube Trade Port Bidair Bus Services Photo Credit: Image SA, Roger Sedres SPONSORED BY: 31

4 Audited Financial Statements for the year ended 28February 2013 Photo Credit: Independent Newspaper 32

5 GeNeRal INfORMaTION Country of incorporation and domicile Type of trust Trustees Business address South Africa Service Trust Prof. KS Naidoo RP de Wet AG Marshall JA de Martin RSS Msengana Dr SM Gulube KL Mboyi General Aviation Area Cape Town International Airport 7525 Postal address PO Box 93 Cape Town International Airport 7525 Annemarie Kellerman Financial Manager Bankers Auditors ABSA Bank Limited Investec Private Bank Limited Nedbank a division of Nedcor Limited Mazars Registered Auditors Trust registration number T3404/94 Level of assurance Preparer These annual financial statements have been audited in compliance with the applicable requirements of the trust deed. The annual financial statements were independently compiled by: David Smith Chartered Accountant (SA) Published 12 June 2013 SPONSORED BY: 33

6 the reports and statements set out below comprise the annual financial statements presented to the trustees. index Independent Auditor s Report Trustees Responsibilities and Approval Trustees Report Statement of Financial Position Statement of Comprehensive Income Statement of Changes in Equity Statement of Cash Flow Accounting Policies Notes to the Audited Financial Statements The following supplementary information does not form part of the annual financial statements and is unaudited: 55 Detailed Income Statement 34

7 INdepeNdeNT auditors RepORT Report on the Financial Statements We have audited the financial statements of The SA Red Cross Air Mercy Service Trust set out on pages 37 to 54, which comprise the statement of financial position as at 28 February 2013, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information. Trustees Responsibility for the Financial Statements The trustees are responsible for the preparation and fair presentation of these annual financial statements in accordance with International Financial Reporting Standards and the Trust Deed, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an 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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion In common with similar organisations, it was not feasible for the trust to institute adequate accounting controls over cash collections from donations and other voluntary income prior to initial entry of collections in the accounting records. Accordingly it was impracticable for us to extend our examination beyond receipts actually recorded. As referred to in note 9 of the financial statements, the trust has made material provisions for repairs and maintenance which will be required on capital assets in the future. In accordance with the International Accounting Standards on Provisions, IAS 37, a provision may not be recognised on future repairs on capital assets. Opinion In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the annual financial statements present fairly, in all material respects, the financial position of The SA Red Cross Air Mercy Service Trust as at 28 February 2013, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Supplementary Information Without qualifying our opinion, we draw attention to the fact that supplementary information set out on pages 55 to 56 does not form part of the financial statements and is presented as additional information. We have not audited this information and accordingly do not express an opinion thereon. Other reports As part of our audit of the financial statements for the year ended 28 February 2013, we have read the Trustees Report for the purpose of identifying whether there are material inconsistencies between this report and the audited financial statements. The report is the responsibility of the trustees. Based on our reading of the report we have not identified material inconsistencies between this report and the audited financial statements. However, we have not audited this report and accordingly do not express an opinion on this report. MAZARS Partner: David Smith Registered Auditor 12 June 2013 Cape Town SPONSORED BY: 35

8 TRuSTeeS ReSpONSIbIlITIeS and approval The trustees are required in terms of the trust deed to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the trust as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the annual financial statements. The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates. The trustees acknowledge that they are ultimately responsible for the system of internal financial control established by the trust and place considerable importance on maintaining a strong control environment. To enable the trustees to meet these responsibilities, the board of trustees sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the trust and all employees are required to maintain the highest ethical standards in ensuring the trust s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the trust is on identifying, assessing, managing and monitoring all known forms of risk across the trust. While operating risk cannot be fully eliminated, the trust endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The trustees are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The trustees have reviewed the trust s cash flow forecast for the year to 28 February 2014 and, in the light of this review and the current financial position, they are satisfied that the trust has or has access to adequate resources to continue in operational existence for the foreseeable future. The external auditors are responsible for independently reviewing and reporting on the trust s annual financial statements. The annual financial statements have been examined by the trust s external auditors and their report is presented on page 35. The annual financial statements set out on pages 37-57, which have been prepared on the going concern basis, were approved by the board of trustees on 12 June 2013 and were signed on its behalf by: Trustee Trustee 36

9 TRuSTeeS RepORT The trustees submit their report for the year ended 28 February Review of activities Main business and operations The SA Red Cross Air Mercy Service Trust operates an air ambulance service, for no financial gain, for the benefit of all ill and injured people. The SA Red Cross Air Mercy Service Trust also provides medical and humanitarian services directed at preservation of life and the alleviation of human suffering, particularly within the rural areas of South Africa. The operating results and state of affairs of the trust are fully set out in the attached annual financial statements and do not in our opinion require any further comment. 2. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 3. Events after the reporting period During April 2013 Aero Medical Solutions Proprietary Limited cancelled their agreement for the purchase of an aircraft of R from The SA Red Cross Air Mercy Service Trust. This balance is included in trade receivables at year end. This agreement has been taken over by The Air Ambulance Service Trust. 4. Trustees The trustees of the trust during the year and to the date of this report are as follows: Name Nationality Prof. KS Naidoo South African RP de Wet South African AG Marshall South African JA de Martin South African RSS Msengana South African Dr. SM Gulube South African KL Mboyi South African 5. Auditors Mazars will continue in office for the next financial period. SPONSORED BY: 37

10 STaTeMeNT Of financial position Figures in Rand Notes Assets Non-Current Assets Property, plant and equipment 3 263,494, ,820,232 Current Assets Inventories 4 4,025,470 4,228,435 Trade and other receivables 5 22,073,223 21,632,416 Cash and cash equivalents 6 458,713 6,592,806 26,557,406 32,453,657 Total Assets 290,051, ,273,889 Equity and Liabilities Equity Trust capital 10,831,920 10,831,920 Accumulated surplus 47,862,461 46,635,453 58,694,381 57,467,373 Liabilities Non-Current Liabilities Other financial liabilities 8 132,124, ,871,268 Provisions 9 34,661,270 34,963, ,785, ,834,717 Current Liabilities Other financial liabilities 8 52,679,670 57,244,433 Trade and other payables 10 11,891,527 16,727,366 64,571,197 73,971,799 Total Liabilities 231,357, ,806,516 Total Equity and Liabilities 290,051, ,273,889 38

11 STaTeMeNT Of COMpReHeNSIve INCOMe Figures in Rand Notes Revenue ,739, ,470,099 Other income 4,257,725 1,179,456 Operating expenses (112,537,755) (116,171,326) Finance costs 15 (16,056,400) (20,235,819) Operating surplus 13 (2,597,026) (5,757,590) Investment revenue ,334 1,648,638 Designated donations for specific capital payments 6,390,000 7,522,289 Gain on disposal of assets (2,805,300) 4,513,681 Surplus for the year 1,227,008 7,927,018 Other comprehensive income - - Total comprehensive surplus 1,227,008 7,927,018 STaTeMeNT Of CHaNGeS IN equity Figures in Rand Trust capital Accumulated Total equity surplus Balance at 01 March ,831,920 38,708,435 49,540,355 Changes in equity Total comprehensive surplus for the year - 7,927,018 7,927,018 Total changes - 7,927,018 7,927,018 Balance at 01 March ,831,920 46,635,453 57,467,373 Changes in equity Total comprehensive surplus for the year - 1,227,008 1,227,008 Total changes - 1,227,008 1,227,008 Balance at 28 February ,831,920 47,862,461 58,694,381 Note(s) SPONSORED BY: 39

12 STaTeMeNT Of CaSH flows Figures in Rand Notes Cash flows from operating activities Cash generated from operations 17 51,831,119 64,922,170 Interest income 239, ,185 Finance costs (16,056,400) (20,235,819) Dividends received - 1,068,453 Net cash from operating activities 36,014,053 46,334,989 Cash flows from investing activities Purchase of property, plant and equipment 3 (6,135,731) (12,967,541) Sale of property, plant and equipment 5,298,930 5,291,648 Sale of assets - 4,513,681 Net movement in loans with related parties - (1,175,310) Net cash from investing activities (836,801) (4,337,522) Cash flows from financing activities Repayment of other financial liabilities (41,311,345) (48,990,520) Net cash from financing activities (41,311,345) (48,990,520) Total cash movement for the year (6,134,093) (6,993,053) Cash at the beginning of the year 6,592,806 13,585,859 Total cash at end of the year 6 458,713 6,592,806 40

13 accounting policies 1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the trust deed. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rands. These accounting policies are consistent with the previous period. 1.1 Significant judgements and sources of estimation uncertainty In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgments include: Trade receivables The trust assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus/loss, the trust makes judgments as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. The impairment for trade receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period. Useful lives and residual values of property, plant and equipment The estimated useful lives as translated into depreciation rates are detailed in the property, plant and equipment policy note in the annual financial statements. These rates and the residual values of the assets are reviewed annually taking cognisance of the forecasted commercial and economic realities and through benchmark accounting treatments in the industry. Impairment testing The trust reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Provisions Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 9 - Provisions. 1.2 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits associated with the item will flow to the trust; and the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value. SPONSORED BY: 41

14 accounting policies (CONTINued) 1.2 Property, plant and equipment (continued) Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. The useful lives of items of property, plant and equipment have been assessed as follows: Item Aircraft Hangar and communication equipment Furniture and fixtures Motor vehicles Leasehold improvements Computer equipment Medical equipment Office equipment Average useful life years 8 years 10 years 5-8 years 5-15 years 3 years 8 years 5 years The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. The depreciation charge for each period is recognised in surplus or loss unless it is included in the carrying amount of another asset. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. 1.3 Financial instruments Initial recognition and measurement Financial instruments are recognised initially when the trust becomes a party to the contractual provisions of the instruments. The trust classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Loans to (from) related parties These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost. Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. 42

15 accounting policies (CONTINued) 1.3 Financial instruments (continued) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. 1.4 Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is assigned using the weighted average cost formula. The same cost formula is used for all inventories having a similar nature and use to the entity. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 1.5 Impairment of assets The trust assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the trust estimates the recoverable amount of the asset. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated. The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. SPONSORED BY: 43