MEDECINS SANS FRONTIERES SOUTHERN AFRICA NPC (REGISTRATION NUMBER 2007/008324/08) ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014

Transcription

1 (REGISTRATION NUMBER 2007/008324/08) ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014

2 Page 1 INDEX The reports and statements set out below comprise the annual financial statements presented to the members: Page Directors' Responsibilities and Approval 2 Independent Auditors' Report 3-4 Directors' Report 5-6 Statement of Financial Position 7 Statement of Surplus or Deficit 8 Statement of Changes in Equity 9 Statement of Cash Flows 10 Accounting Policies Notes to the Annual Financial Statements The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Statement of Surplus or Deficit 29 Notes to the Detailed Statement of Surplus or Deficit 30 LEVEL OF ASSURANCE These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act No. 71 of PREPARER These financial statements were prepared under the supervision of KC Rottok Chesaina CA (SA) RA of Mueni Management Consulting Proprietary Limited.

3 Page 2 DIRECTORS' RESPONSIBILITIES AND APPROVAL The directors are required in terms of the Companies Act No.71 of 2008 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 company 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 directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board 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 company and all employees are required to maintain the highest ethical standards in ensuring the company s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors 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 directors have reviewed the company s cash flow forecast for the year to 31 December 2015 and, in the light of this review and the current financial position, they are satisfied that the company 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 company's annual financial statements. The annual financial statements have been examined by the company's external auditors and their report is presented on pages 3 to 4. The annual financial statements set out on pages 5 to 28, which have been prepared on the going concern basis, were approved by the board of directors and signed on its behalf by: Director Director Date Date

4 INDEPENDENT AUDITORS' REPORT To be inserted by RSM

5 Second page of audit report to be inserted by RSM

6 Page 5 DIRECTORS' REPORT The directors submit their report for the year ended 31 December INCORPORATION The company was incorporated on 14 March 2007 and obtained its certificate to commence business on the same day. 2. REVIEW OF ACTIVITIES Main business and operations Medecins Sans Frontieres Southern Africa is a humanitarian organisation, which provides emergency medical aid to populations in danger due to epidemics, armed conflicts and other natural and man-made disasters. The operating results and state of affairs of the company are fully set out in the attached annual financial statements and do not in our opinion require any further comment. The net surplus of the company was R (2013: R deficit ; 2012: R surplus). 3. 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. The ability of the company to continue as a going concern is dependent on a number of factors. The most significant of these is that the directors continue to procure funding for the ongoing operations for the company. 4. EVENTS AFTER THE REPORTING PERIOD The directors are not aware of any matter or circumstance arising since the end of the financial year that has a material impact on the annual financial statements. 5. DIRECTORS' INTEREST IN CONTRACTS There were no directors' interest in contracts that require disclosure. 6. ACCOUNTING POLICIES The annual financial statements have been prepared in accordance with International Financial Reporting Standards on a basis consistent with the previous period, except for the adoption of new or revised standards set out in note NON-CURRENT ASSETS Property, plant and equipment amounting to R (2013: R ) (2012: R ) were purchased during the year in order to expand on the operations in South Africa.

7 Page 6 DIRECTORS' REPORT 8. DIRECTORS The directors of the company during the year and to the date of this report are as follows: Name Nationality Changes G C Barnwell South African E M Chidovi Zimbabwean M T Nicolai Dutch F Tezera Belgian A Mdeni Malawian M Dalwai South African Appointed 29 September 2014 N A De Torrente Swiss Resigned 29 September 2014 N P Ford British Resigned 29 September 2014 S J M Miller South African D G Sermand French Appointed 29 September 2014 K E Noko Zimbabwean Appointed 29 September 2014 D S Van Zyl South African Appointed 29 September 2014 L Nkomo Zimbabwean Appointed 29 September SECRETARY The secretary of the company is S J M Miller and he was appointed to his position on 24 April Business address: 3rd Floor Orion Building 49 Jorissen Street BRAAMFONTEIN 2017 Postal address: P O Box BRAAMFONTEIN AUDITORS RSM Betty & Dickson (Johannesburg) have expressed their willingness to continue in office as auditors in accordance with section 90 of the Companies Act No.71 of AUTHORISED AND ISSUED SHARE CAPITAL The company is incorporated under section 36 of the Companies Act No. 71 of 2008 and thus has no authorised or issued share capital.

8 Page 7 STATEMENT OF FINANCIAL POSITION Figures in Rand Note ASSETS NON-CURRENT ASSETS Property, plant and equipment CURRENT ASSETS Amounts due from associated companies Trade and other receivables Cash and cash equivalents Total Assets EQUITY AND LIABILITIES EQUITY Accumulated surplus LIABILITIES NON-CURRENT LIABILITIES Other financial liability Instalment sale liability CURRENT LIABILITIES Amounts due to associated companies Instalment sale liability Trade and other payables Deferred income Total Liabilities Total Equity and Liabilities

9 Page 8 STATEMENT OF SURPLUS OR DEFICIT Figures in Rand Note Revenue Other income Operating expenses ( ) ( ) Operating (deficit)/surplus 12 ( ) ( ) Investment revenue Fair value adjustments Finance costs 15 (46 419) - Surplus/(deficit) for the year ( )

10 Page 9 STATEMENT OF CHANGES IN EQUITY Figures in Rand Accumulated surplus Total equity Balance at 01 January Changes in equity Total comprehensive deficit for the year ( ) ( ) Total changes ( ) ( ) Balance at 01 January 2014 as previously reported Adjustments Prior period errors ( ) ( ) Balance at 01 January 2014 as restated Changes in equity Total comprehensive surplus for the year Total changes Balance at 31 December

11 Page 10 STATEMENT OF CASH FLOWS Figures in Rand Note CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts Cash paid to suppliers and employees ( ) ( ) Cash generated from operations 18 ( ) Interest income Finance costs (31 089) - Net cash from operating activities ( ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 3 ( ) ( ) Proceeds on disposal of property, plant and equipment Net cash from investing activities ( ) ( ) CASH FLOWS FROM FINANCING ACTIVITIES Instalment sale liability payments (81 386) - Net movement in group company loans Net cash from financing activities Total cash movement for the year Cash at the beginning of the year Total cash at end of the year

12 Page 11 ACCOUNTING POLICIES 1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act No.71 of The annual financial statements have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal accounting policies set out below. They are presented in South African Rands. 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 judgement 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 judgements include: Fair value estimation The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments. Property, plant and equipment Management have made certain assumptions with regards to the determination of estimated useful lives and residual values of items of property, plant and equipment, as discussed further in note 1.2. Leases Management have applied judgement to classify all lease agreements that the company is party to as operating lease, as they do not transfer substantially all risks and rewards of ownership to the company. Furthermore, as the operating lease in respect of premises is only for a relatively short period of time, management have made a judgement that it would not be meaningful to classify the lease into separate components for the land and buildings for the current lease, and the lease will be classified in its entirety as an operating lease. 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 company; and the cost of the item can be measured reliably. Day to day expenses incurred on property, plant and equipment are expensed directly in surplus or deficit for the period. Major maintenance that meets the recognition criteria is capitalised. Depreciation commences when an asset is available for use. Depreciation is charged so as to write off the depreciable amount of items, other than land, to their residual values, over their estimated useful lives, using a method that reflects the pattern in which the assets future economic benefits are expected to be consumed by the company. Property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses.

13 Page 12 ACCOUNTING POLICIES 1.2 PROPERTY, PLANT AND EQUIPMENT (continued) The useful lives of items of property, plant and equipment have been assessed as follows: Item Leasehold improvements Furniture and fixtures Motor vehicles Office equipment Computer equipment Computer software Average useful life 5 years 6 years 5 years 5 years 3 years 2 years The residual value and useful life of each asset are reviewed at the end of each financial reporting period. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset. The surplus or deficit arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The surplus or deficit 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 The company 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. Financial instruments are measured initially at fair value. In the case of financial assets or liabilities not classified at fair value through surplus or deficit, transaction costs that are directly attributable to the acquisition or issue of the financial instrument are added to the fair value. For financial instruments which are not at fair value through surplus or deficit, transaction costs are included in the initial measurement of the instrument. Subsequent measurement After initial measurement financial assets are recognised as follows: Loans and receivables are measured at amortised cost less any impairment deficits recognised to reflect irrecoverable amounts. Financial assets classified as available-for-sale or at fair value through surplus or deficit are measured at fair values. Fair value, for this purpose, is market value if listed, or value arrived at by using appropriate valuation models, if unlisted. Financial liabilities at fair value through surplus or deficit, including derivatives that are liabilities are measured at fair value. Other financial liabilities are measured at amortised cost using effective interest rate method.

14 Page 13 ACCOUNTING POLICIES 1.3 FINANCIAL INSTRUMENTS (continued) Surpluses and deficits A surplus or deficit arising from a change in a financial asset or financial liability is recognised as follows: Where financial assets and financial liabilities are carried at amortised cost, a surplus or deficit is recognised in surplus or deficit through the amortisation process and when the financial asset or financial liability is derecognised or impaired. Surplus or deficit on a financial asset or financial liability classified at fair value through surplus or deficit is recognised in surplus or deficit. Surplus or deficit on an available for sale financial asset is recognised directly in reserves, through the statement of changes in reserves, until the financial asset is derecognised, at which time the cumulative surplus or deficit previously recognised in reserves is recognised in surplus or deficit. Derecognition of financial instruments The company derecognises the financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and the associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. The company derecognises the financial liability when, and only when, the company's obligations are discharged, cancelled or they expire. The particular recognition methods adopted are disclosed in the individual policies below: Loans to/(from) group companies These include loans to and from related parties. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities. Loans to shareholders, directors, managers and employees These financial assets are classified as loans and receivables. Trade and other receivables Trade and other receivables are classified as loans and receivables. Impairment is determined on a specific basis, where each asset is individually evaluated for impairment indicators. Write-downs of these assets are expensed in surplus or deficit. Trade and other payables Trade payables are classified as other liabilities. Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments that are readily convertible to a known amount of cash. These are initially and subsequently recorded at fair value.

15 Page 14 ACCOUNTING POLICIES 1.3 FINANCIAL INSTRUMENTS (continued) Impairment of financial assets Other financial assets classified as loans and receivables are initially recognised at fair value plus transaction costs, and are subsequently carried at amortised cost less any accumulated impairment. Financial assets, other than those at fair value through surplus or deficit, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. The carrying amount of the financial asset is reduced by the impairment deficit directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in surplus or deficit. 1.4 LEASES A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Operating leases lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted. Any contingent rents are expensed in the period they are incurred. 1.5 IMPAIRMENT OF ASSETS The company 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 company 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 deficit. An impairment deficit of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in surplus or deficit. Any impairment loss of a revalued asset is treated as a revaluation decrease. An impairment deficit is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units. The impairment deficit is allocated to reduce the carrying amount of the assets of the unit in the following order: first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit; and then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

16 Page 15 ACCOUNTING POLICIES 1.5 IMPAIRMENT OF ASSETS (continued) 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 deficit does not exceed the carrying amount that would have been determined had no impairment deficit been recognised for the asset in prior periods. A reversal of an impairment deficit of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in surplus or deficit. Any reversal of an impairment deficit of a revalued asset is treated as a revaluation increase. 1.6 EMPLOYEE BENEFITS Short-term employee benefits The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. 1.7 REVENUE Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable from donations and grants. Donations and grants in respect of specific projects are recognised as income over the duration of the project as and when the expenditure is incurred. Donations and grants received which are project specific and are not utilised are deferred until the expenditure is incurred. Donations that are not donor or specific are recognised as income when they are received. Interest is recognised in surplus or deficit using the effective interest rate method.

17 Page 16 ACCOUNTING POLICIES 1.8 TRANSLATION OF FOREIGN CURRENCIES Foreign currency transactions A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of the reporting period: foreign currency monetary items are translated using the closing rate; non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in surplus or deficit in the period in which they arise. When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in surplus or deficit, any exchange component of that gain or loss is recognised in surplus or deficit. Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow. 1.9 PROVISIONS Provisions are recognised when: the company has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation INSTALMENT SALE LIABILITY Instalment sale liabilities are recognised as liabilities in the statement of financial position at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. The lease payments are apportioned between the finance charge and reduction of the outstanding liability.the finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability.

18 Page 17 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS 2.1 Standards and interpretations effective and adopted in the current year In the current year, the company has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations: Standard Effective date IAS 36 - Recoverable Amount Disclosures for Non-Financial Assets 01 January 2014 The adoption of this standard has had no material impact on the company. 2.2 Standards and interpretations early adopted The company has chosen not to early adopt any new standards and interpretations. 2.3 Standards and interpretations not yet effective The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the company s accounting periods beginning on or after 01 January 2015 or later periods: Standard Effective date IFRS 13 Annual improvements for and cycle- Fair value measurement1 July 2014 IAS 16 Annual improvements for the cycle - Property, plant and equipment 1 July 2014 IAS 24 Annual improvements for the cycle - Related party disclosures 1 July 2014 IFRS 9 Financial instruments - Classification and measurement 1 January 2018 IFRS 15 Revenue from contracts with customers 1 January 2017 IAS 1 Presentation of financial statements (Amendments) - Disclosure initiative 1 January 2016 IAS 16 Property, plant and equipment (Amendments) - Depreciation 1 January 2016 The adoption of these standards is not expected to have a material impact on the company. 2.4 Standards and interpretations not yet effective or relevant All other standards and interpretations have been considered and are not relevant. 3. PROPERTY, PLANT AND EQUIPMENT Cost Accumulated depreciation Carrying value Cost Accumulated depreciation Carrying value Furniture and fixtures ( ) ( ) Motor vehicles (79 936) ( ) Office equipment (8 007) (39 320) IT equipment ( ) ( ) Computer software (49 422) ( ) Leasehold improvements ( ) ( ) Total ( ) ( )

19 Page 18 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand 3. PROPERTY, PLANT AND EQUIPMENT (continued) Cost 2012 Accumulated depreciation Carrying value Furniture and fixtures ( ) Motor vehicles ( ) Office equipment (32 448) - IT equipment ( ) Computer software (95 909) Leasehold improvements ( ) Total ( ) Reconciliation of property, plant and equipment Opening balance Additions Disposals Depreciation Total Furniture and fixtures Motor vehicles (24 577) Office equipment (880) IT equipment (4 583) (91 540) Computer software (416) (7 590) Leasehold improvements Reconciliation of property, plant and equipment (23 881) (35 726) Opening balance Additions Disposals Depreciation Total Furniture and fixtures (47 498) Motor vehicles (25 842) Office equipment (6 872) IT equipment (5 375) ( ) Computer software (6 822) Leasehold improvements (61 683) Pledged as security (5 375) ( ) Property, plant and equipment with a carrying amount of R is subject to security, refer to Note 8.

20 Page 19 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand AMOUNTS DUE TO/(FROM) ASSOCIATED COMPANIES Related companies Medecines Sans Frontieres - USA Medecins Sans Frontieres - Khayelitsha Medecins Sans Frontieres-Belgium Medecins Sans Frontieres-Switzerland Medecins Sans Frontieres-Spain Medecins Sans Frontieres-France Medecins Sans Frontieres-OCA Medecins Sans Frontieres-Netherlands Medecins Sans Frontieres - Geneva- Maputo Medecins Sans Frontieres - OCB- Zimbabwe Medecins Sans Frontieres - Canada Medecins Sans Frontieres-Epicentre (43 408) - - ( ) (34 433) (49 265) (7 793)

21 Page 20 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand AMOUNTS DUE TO/(FROM) ASSOCIATED COMPANIES (continued) Medecins Sans Frontieres-Switzerland Medecins Sans Frontieres-Brazil Medecins Sans Frontieres-Malawi Medecins Sans Frontieres - Belgium (21 511) - - Medecins Sans Frontieres-Geneva Medecins Sans Frontieres-Netherlands Medecins Sans Frontieres-Belgium Current assets Current liabilities ( ) (42 226) (49 265) Credit quality of amounts due from associated companies No credit quality of amounts due from associated companies is performed. As amounts due from associated companies do not have any terms of repayment, there are no amounts that are past their due date. All amounts due from associated companies were considered recoverable and hence have not been impaired or provided for. Fair value of amounts due to and from associated companies There is no material difference between the fair value of amounts due to and from associated companies and their book value.

22 Page 21 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand TRADE AND OTHER RECEIVABLES Fundraising income receivable Prepayments Deposits Value-added Taxation Other receivables Grants receivable Advance Fair value of trade and other receivables There is no material difference between the fair value of trade and other receivables and their book value. 6. CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of: Cash on hand Bank balances There is no material difference between the fair value of cash and cash equivalents and the book value. 7. OTHER FINANCIAL LIABILITY Medecins Sans Frontieres - Belgium The loan is unsecured, interest free, is repayable in December 2016 and has a book value of R It is accounted for at amortised cost and has been discounted at a rate of 9.25% to its year end fair value over a two year repayment period. The fair value adjustment amounted to R refer note INSTALMENT SALE LIABILITY Minimum lease payments due - within one year in second to fifth year inclusive Present value of minimum lease payments Non-current liabilities Current liabilities The company's obligations under instalment sale agreements are secured by the lessor's charge over the assets. Refer note 3. The agreement bears interest at prevailing market rates and is repayable over a period of 60 months in monthly instalments of R5 184.

23 Page 22 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand TRADE AND OTHER PAYABLES Trade payables Other payables Accrued leave pay Other accrued expenses Fair value of trade and other payables There is no material difference between the fair value of trade and other payables and their book value. 10. DEFERRED INCOME Deferred income relates to local fundraising income received and grants received for specific projects, but not yet utilised. As at year end the following earmarked funding and grants for SAMU, UNITAID and training had not been transferred to their respective projects. Fundraising Earmarked Khayelitsha Fundraising Earmarked Emergency Relief Fund Fundraising Earmarked Ebola Grants SAMU Grants Training Grants UNITAID

24 Page 23 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand REVENUE Grants received Fundraising income Fundraising income consists of the following: Individuals and private institutions Discovery Health Nedbank foundation OPERATING (DEFICIT)/SURPLUS Operating (deficit)/surplus for the year is stated after accounting for the following: Operating lease charges Premises Contractual amounts Surplus on sale of property, plant and equipment Depreciation of property, plant and equipment Employee costs INVESTMENT REVENUE Interest revenue Bank FAIR VALUE ADJUSTMENTS Other financial liabilities FINANCE COSTS Instalment sale liability South African Revenue Services TAXATION No provision has been made for 2014 taxation as the company is exempt from tax in terms of section 10(1)(cN) of the Income Taxation Act No. 58 of 1962.

25 Page 24 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand AUDITORS' REMUNERATION Fees Other services CASH GENERATED FROM OPERATIONS (Deficit)/surplus before taxation ( ) Adjustments for: Depreciation Surplus on disposal of property, plant and equipment (44 341) (1 318) Deficit on foreign exchange differences Interest received ( ) ( ) Finance costs Fair value adjustments ( ) - Changes in working capital: Trade and other receivables (83 957) ( ) Trade and other payables Deferred income ( ) COMMITMENTS Operating leases as lessee (expense) ( ) Minimum lease payments due - within one year in second to fifth year inclusive Operating lease payments represent rentals payable by the company for certain of its office properties and office equipment. Leases are negotiated for an average term between three to five years and rentals increase between 10% to 15% per annum. During the period ended 31 December 2014, R (2013: R ) was recognised as an expense in the Statement of Surplus or Deficit and Other Comprehensive Income.

26 Page 25 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand RELATED PARTIES ` Relationships Medecins Sans Frontieres Southern Africa has the following related party transactions through common directors: Medecins Sans Frontieres-Khayelitsha Medecins Sans Frontieres-Belgium Medecins Sans Frontieres-International Medecins Sans Frontieres-United Kindom Medecins Sans Frontieres-Canada Medecins Sans Frontieres-Sweden Medecins Sans Frontieres-Italy Medecins Sans Frontieres-Supply Medecins Sans Frontieres-France Medecins Sans Frontieres-Luxembourg Medecins Sans Frontieres-Geneva Medecins Sans Frontieres-USA Medecins Sans Frontieres-Brazil Medecins Sans Frontieres-Maputo Medecins Sans Frontieres-Paris Medecins Sans Frontieres-Hong Kong Medecins Sans Frontieres-Malawi Medecins Sans Frontieres-Netherlands Medecins Sans Frontieres-Spain Medecins Sans Frontieres-Switzerland Related party balances Amounts included in amounts owing (to)/from associated companies, trade payables and other financial liability regarding related parties MSF-Belgium Trust ( ) (34 433) Medecins Sans Frontieres-Belgium Medecins Sans Frontieres-Geneva Medecins Sans Frontieres-Switzerland Medecins Sans Frontieres-OCA Medecins Sans Frontieres-B-eshowe Medecins Sans Frontieres-Switzerland Medecins Sans Frontieres-Italy Medecins Sans Frontieres-Access Campaign-China Medecins Sans Frontieres-Spain Medecins Sans Frontieres-Netherlands - (7 793) Medecins Sans Frontieres-Patent pool Medecins Sans Frontieres-Epicentre Medecins Sans Frontieres-OCBA Medecins Sans Frontieres-Paris Medecins Sans Frontieres-Netherlands Medecins Sans Frontieres-Belgium-CT co-ordination Medecins Sans Frontieres - Geneva Medecins Sans Frontieres Belgium (21 511) (67 425) Medecins Sans Frontieres-USA (43 408) - Medecins Sans Frontieres- OCB - Zimbabwe Medecins Sans Frontieres-Canada (67 104) Medecins Sans Frontieres-Belgium ( ) -

27 Page 26 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand RELATED PARTIES (continued) Related party transactions Revenue- Grants received Medecins Sans Frontieres- Belgium ( ) ( ) Expenses - Grants paid Medecins Sans Frontieres-Khayelitsha PRIOR PERIOD ERRORS In prior years the company used to incur expenses on behalf of Belgium and recover these expenditures in the form of grants from Belgium, however, for the 2013 Financial year Belgium changed the process and gave MSF SA an "Advanced grant" to be used on SAMU, UNITAID and Training which are MSF Belgium projects. It was noted that as at end of 2013 financial year the company had R , advanced grants received from Belgium for the UNITAID, Training and SAMU divisions, as the amount were earmarked for these specific projects the grants were not used for other admin expenses. As per MSF policies, funds received for specific projects are earmarked for that project and the funds may not be used on any other project, hence as at year end any funds received for a specific project and were not used, are raised as income received in advance/ deferred income. The correction of the error results in adjustments as follows: Statement of Financial Position Increase in deferred income - ( ) Opening accumulated surplus Statement of Surplus or Deficit and Other Comprehensive Income Decrease in revenue DIRECTORS' EMOLUMENTS Emoluments paid to the directors or any individuals holding a prescribed office during the year are as follows: Executive 2014 Emoluments Pension Total D M Berman Emoluments Pension Total D M Berman

28 Page 27 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand 23. CATEGORIES OF FINANCIAL INSTRUMENTS Cash and cash equivalents as per note 6, trade and other receivables as per note 5, amounts due from associated companies as per note 4 are classified as loans and receivables and subsequently measured at amortised cost. Amounts due from associated companies as per note 4, other financial liabilities as per note 7, instalment sale liability as per note 8 and trade and other payables as per note 9 are classified (and subsequently measured) as financial liabilities at amortised cost. 24. RISK MANAGEMENT Capital Risk Management The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines. The company s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities. Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored. The table below analyses the company s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. At 31 December 2014 Less than 1 year Between 1 and 2 years Between 2 and 5 years Amounts due from associated companies Trade and other payables Other financial liabilities Instalment sale liability At 31 December 2013 Less than 1 year Amounts due from associated companies Trade and other payables At present, the company does expect to pay all liabilities at their contractual maturity. In order to meet such cash commitments, the company expects the operating activity to generate sufficient cash inflows. In addition, the company holds financial assets for which there is a liquid market and that are readily available to meet liquidity needs. Interest rate risk

29 Page 28 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rand 24. RISK MANAGEMENT (continued) The company s interest rate risk mainly concerns financial assets. Assets are floating rate and non-interest bearing. At present, the company does not hold loans and receivables that are long term in nature. The following table analyses the breakdown of assets/liabilities by type of interest rate: 2014 Floating rate interest bearing Cash and cash equivalents Floating rate interest bearing Cash and cash equivalents Sensitivity analysis A hypothetical increase/decrease in interest rates by 50 basis points, with all other variables remaining constant, would increase/decrease profits after tax by R (2013: R26 111). A hypothetical increase/decrease in interest rate by 100 basis points, with all other variables remaining constant, would increase/decrease profits after tax by R (2013: R52 222). The analysis has been performed for floating interest rate financial assets. The impact of a change in interest rates on floating interest rate financial assets has been assessed in terms of changing of their cash flows and therefore in terms of the impact on net expenses. Credit risk Credit risk consists mainly of cash deposits, cash equivalents and trade and other receivables and amounts due from associated companies. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party. Financial assets exposed to credit risk at year end were as follows: ` Financial instrument Loans to group companies Trade and other receivables Cash and cash equivalents Foreign exchange risk The company does not have any financial assets or liabilities which are exposed to foreign currency translation risk as they are all South African Rand denominated.

30 Page 29 DETAILED STATEMENT OF SURPLUS OR DEFICIT Figures in Rand Note Revenue Grants received Fundraising income Other income Sundry income Interest received Surplus on disposal of assets Fair value adjustments Operating expenses Auditors' remuneration 17 ( ) ( ) Bank charges ( ) (88 391) Computer expenses (85 062) ( ) Deficit on exchange differences (2 805) (3 977) Depreciation (35 726) ( ) Design and media production ( ) ( ) Donations ( ) ( ) Employee costs ( ) ( ) Equipment small items not capitalised (40 383) (69 911) Expenses excluded-other categories 25 ( ) ( ) Lease rentals on operating lease ( ) ( ) Merchandising costs (15 705) (16 835) Motor vehicle expenses ( ) ( ) Other consulting and professional fees ( ) ( ) Other personnel related costs 26 ( ) ( ) Unpaid sections (5 400) - Fines and penalties (50) - Postage (61 813) (66 260) Printing and stationery (89 519) (90 273) Promotions and advertising ( ) ( ) Repairs and maintenance ( ) ( ) Subscriptions (49 280) (29 382) Telephone and fax ( ) ( ) Training 27 ( ) ( ) Travel costs 28 ( ) ( ) Water and electricity (83 324) (62 403) ( ) ( ) Operating surplus/(deficit) ( ) Finance costs 15 (46 419) - Surplus/(deficit) for the year ( ) The supplementary information presented does not form part of the annual financial statements and is unaudited

31 Page 30 NOTES TO THE DETAILED STATEMENT OF SURPLUS OR DEFICIT Figures in Rand EXPENSES EXCLUDED- OTHER CATEGORIES Expenses excluded - other categories which consists of the following: Board meetings General assembly Luncheon vouchers Media conference Other costs OTHER OPERATIONAL COSTS Personnel related costs consists of the following: Staff recruitment costs Other personnel related costs TRAINING Training costs consist of the following: Staff training TRAVEL Travel costs consist of the following: Transport Travel and accomodation Other travel expenses The supplementary information presented does not form part of the annual financial statements and is unaudited