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Annual Report 2011
Improving lives with quality medicines
Open page for inside cover
Table of contents
Association Profile
Mission, Values and Profile ……………………………..……………….…….
Modus Operandi and Secretariat Organogram ……………….…………
PIASA Committee Structure ……………………………………………………
Executive Council ………………………………………….………………….…
2-7
2
3
4-6
7
President and Chief Operating Officer’s Review
Introduction and Summary ……………………………………….……..….…
Priorities ……………………………………….……………………….….….…
Government Affairs and Policy
Transformation
Skills Development
Health Outcomes and Policy
Communications
SciTech
Marketing
International Representation …………………………….………..…….…
Membership ………………………………………………….……………….
Honorary Life Membership ………………………………….…..……….…
Thanks ……………………………………..…………….………………….…
8-11
8
8-10
10
11
11
11
Strategic Meetings 12
Committees to the Exco 13 -19
Government Affairs and Policy ……………………………….……..……… 13-14
Transformation ……………………………………..……..………………….…
Skills Development ……………………………………...………………….…
15 - 16
17
Health Outcomes and Policy …………………………………………..……
Communications ……………………………………..….………………….…
18
19
Standing Committees
Science and Technology (SciTech) ……………..……….………..….…
Clinical
Regulatory and Export
Pharmacovigilance & Medical Information
Quality Management
Marketing Code …………………………………..……….………..….…
20 – 24
20-23
24
Annual Financial Statements 25 – 44
Past Presidents and Honorary Life Members 45 - 46
PIASA Secretariat Contact details 47
Members of PIASA
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1
Association Profile
The Pharmaceutical Industry Association of South Africa (PIASA) is a trade association of
companies involved in the manufacture and/or marketing of prescription medicines in
South Africa.
Membership is voluntary and includes a broad representation of research based
multinational and local/generic pharmaceutical companies operating in South Africa.
The members of PIASA aim to increase access to medicines in the South African market.
PIASA companies are important members of the South African business community,
marketing medicines, including both innovative and generic medicines, to the health
professions, while promoting and safeguarding the interests of members.
Mission
To sustain a favourable environment for the continued development of the pharmaceutical
industry in South Africa as it strives to increase access to quality medicines, with the ultimate
aim of saving lives and improving the quality of life for all South Africans.
Values
Members of PIASA subscribe to the following values:
Respect for intellectual property rights
Commitment to good corporate governance
Commitment to the Code of Marketing Practice
Adherence to best practice in manufacturing, clinical research, distribution and
regulatory affairs
Profile
Pharmaceutical trade organisation with voluntary membership.
Members comprise research-based multinational and local/generic pharmaceutical
companies operating in South Africa.
19 members at December 2011.
30% Private Sector Market Share
PIASA represents South Africa internationally as a member of the International Federation of
Pharmaceutical Manufacturers and Associations (IFPMA)
Represent members’ interests in Africa as a member of the NEPAD Foundation.
2
Modus Operandi
The PIASA Executive Council is democratically elected annually and leads the association in
decision-making, providing strategic leadership and determining policy. Elected from Exco is the
Management Council which is responsible for financial issues and administration.
The Science and Technology (SciTech) and Marketing Committees, two expert committees,
report to the Executive Council. During 2011 additional ad hoc committees dealt with the main
issues of importance to industry: Government Affairs and Policy, Transformation, Skills
Development, Health Outcomes/Policy, and Communications.
The numerous activities of PIASA are supported by a secretariat under the leadership of the Chief
Operating Officer, Vicki St Quintin, who reports to the Management Council.
2011 Secretariat Structure
Chief Operating Officer
Vicki St Quintin
(reports to Management Council)
Financial Function
Contracted out
Personal Assistant & Office
Administrator
Betsie von Wielligh
Office Assistant
Agreta Njeje
Head: Scientific and
Regulatory Affairs
Kirti Narsai
Scientific & Regulatory Affairs
Coordinator
Christine Schoeman
3
PIASA Committee Structure
The work of the executive team is complemented by the efforts of the wider membership
through various committees and the PIASA Secretariat. A great deal of time and resources are
spent on the most pressing industry issues and priority committees are formed to deal with these.
Exco offers strategic direction and leadership to the association.
Executive Council Members
The 2010/2011 PIASA Executive Council (18 August 2010 to 6 July 2011): President: Jonathan
Louw (Adcock Ingram), Pierre Bosch (Alcon), Guni Goolab (AstraZeneca), Richard de Chastelain
(Bayer Schering Pharma), Jenny Wright (Galderma), Kobus Venter (Janssen-Cilag), Godwin
Jacob (Merck), Ashley Pearce (MSD), Steve Speller (Servier), and Amanda Wilde (Umsinsi Health
Care).
The 2011/2012 PIASA Executive Council was elected at the Annual General meeting held on
6 July 2011: President to November 2011: Ashley Pearce (MSD), President from November 2011:
Pierre Bosch (Alcon Laboratories), Laura Engelbrecht Joubert (Abbott Laboratories), Guni
Goolab (AstraZeneca), Richard de Chastelain (Bayer Schering Pharma), Jenny Wright
(Galderma), Kobus Venter (Janssen), Magriet de Wet (Key Oncologics), Klaus Boehm (Merck),
Timothy Kedijang (Novo Nordisk), Steve Speller (Servier), Amanda Wilde (Umsinsi Health Care).
Changes to Exco during 2011
Laura Engelbrecht Joubert was co-opted to the Executive Council on 4 May 2011.
Ashley Pearce (MSD) resigned as President, Management Council and EXCO member on
23 November 2011.
Following Ashley’s resignation:
Pierre Bosch (Alcon) was elected the new President – 23 November 2011
Laura Engelbrecht Joubert (Abbott Laboratories) was elected to the Management
Council – 23 November 2011 and
Timothy Kedijang (Novo Nordisk) was elected as a member of the Executive Council –
23 November 2011.
Management Council
PIASA’s Management Council is responsible for financial and administrative matters. The
Management Council was elected by the Executive Council on 6 July 2011. Ashley Pearce
(MSD) was elected President. The elected Vice Presidents for multinational companies were
Pierre Bosch (Alcon Laboratories) and Steve Speller (Servier). The Vice President elected for local
companies was Jonathan Louw (Adcock Ingram).
4
Committees to the Exco
PIASA’s priority committees are structured to address the most pressing needs of industry and are
reviewed annually. Standing committees, SciTech and Marketing, continue as core to the
organisations’s activities. Full reports on these committee activities are available from page 13 in
this report.
Government Affairs & Policy - The primary task of the Government Affairs & Policy Committee is
to deal with public policy affecting the industry. Issues such as pricing of medicines, National
Health Insurance are addressed by this Committee.
Transformation - The Transformation Committee leads and supports members in the
implementation of Broad-Based Black Economic Empowerment.
Skills Development - The Skills Development Working group was established during 2011 to
address the shortage of skills in the pharmaceutical industry.
Health Outcomes - The Health Outcomes Committee addresses issues affecting the funding of
and access to medicines in the private sector with a focus on the interests of patients.
Communications - Issues relating to the image of the industry and PIASA are the main focus of
the Communications Committee. This group aims to communicate the value of both medicines
and local industry investment to a broad audience.
Science and Technology (SciTech)
SciTech acts in the interests of members on all scientific, regulatory, clinical and technical
matters. The activities of SciTech and its various sub-committees are reviewed annually in order
to address the most pressing issues and add more value to member companies in a proactive
manner.
Marketing Committee
The Marketing Committee is dedicated to the development of a regulated South African Code
of Marketing Practice and oversees the adherence to these principles by the membership.
As a member of the International Federation of Pharmaceutical Manufacturers and
Associations, the committee upholds the standards of the IFPMA Code of Marketing Practice.
5
August 2010 to July 2011
July 2011 to December 2011
2011 PIASA Committee Structure
Executive Council (elected 8 multinational and 3 local/generic) - Strategic Direction &
Leadership
Management Council (4 elected from Exco) – Financial & Administrative matters
Strategic Committees to the EXCO – Identified Strategic Priority Areas
Government
Affairs/Policy
Jonathan Louw
Science & Technology Committee
(SciTech)
Kobus Venter
Management Council
Ashley Pearce
Jonathan Louw
Pierre Bosch
Steve Speller
Executive Council
President
Ashley Pearce
Supported by the Secretariat
Marketing Committee
Steve Speller
Transformation
Amanda Wilde
Communication
Richard de
Chastelain
Health Outcomes
Laura Engelbrecht
Joubert
Skills Group
Vicki St Quintin
Intellectual Property
Ashley Pearce
Management Council
Science & Technology Committee (SciTech)
Kobus Venter
Executive Council
President
Ashley Pearce
Marketing Committee
Steve Speller
Government Affairs/Policy
Jonathan Louw
Transformation
Amanda
Wilde
Health Outcomes
Sudier Ramparsad
Communication
Richard de Chastelain
Intellectual Property
Ashley Pearce
Supported by the Secretariat
6
Guni Goolab
AstraZeneca
PIASA Executive Council
Elected July 2011
Jonathan Louw
Adcock Ingram Management Council Member
Magriet de Wet
Key Oncologics
Laura Engelbrecht Joubert
Abbott Laboratories Management Council Member
Richard de Chastelain
Bayer HealthCare
Kobus Venter
Janssen
Steve Speller
Servier Management Council Member
Jenny Wright
Galderma
The functioning of the Executive Council is supported by the COO, Vicki St Quintin
and the Head: Scientific & Regulatory Affairs, Kirti Narsai
Pierre Bosch
Alcon Laboratories
President from November 2011
Management Council Member
Klaus Boehm
Merck
Timothy Kedijang
Novo Nordisk
Amanda Wilde
Umsinsi Health Care
Ashley Pearce
MSD
President from August 2010 to November 2011
Management Council Member
7
Pierre Bosch
Alcon Laboratories
President from November 2011
Ashley Pearce
MSD
President from August 2010 to November 2011
Vicki St Quintin
PIASA
Chief Operating Officer
Annual Review
by the President and Chief Operating Officer on behalf of the Executive Council
Introduction and Summary
During the year under review much attention was given to key issues impacting on industry,
being International Benchmark Pricing of Medicines, National Health Insurance (NHI), and
registration delays for medicines.
A Strategic meeting was held November 2011, which brought together the membership to
determine the strategic direction for the association. This was followed up with a further
meeting to determine specific actions in February 2012.
Priority Issues
The most important issues dealt with by PIASA’s committees included International Benchmark
Pricing, registration delays, transformation, healthcare funding and the promotion of clinical
research. A dedicated skills group was established early in 2011 to address the skills shortages in
the industry. The standing committees, SciTech and Marketing, continued as core to the
organisation’s activities. Issues of common interest in the industry were dealt with in the
Pharmaceutical Task Group (PTG) a voluntary grouping of associations IMSA, PHARMISA, PIASA
and SMASA. The NAPM withdrew from the PTG during 2011.
Every effort was made to communicate and consult with the membership timeously on all key
issues.
A very short synopsis of the issues dealt with by the priority and standing committees follows:
8
Government Affairs and Policy
National Health Insurance – PIASA, through the PTG, continued to address the Government’s
National Health Insurance system for South Africa. Comment on pharmaceuticals was made in
response to the Green Paper published in August 2012. The important issues for industry i.e.:
medicine policy, funding of medicines, selection of medicines, procurement principles, voluntary
procurement and pricing were included in this document.
International Benchmarking – A PTG submission was made in July 2011 in response to the draft
Methodology on International benchmarking published December 2010. Further discussions on
IBM resumed with the DoH in 2012.
Annual Price Increases - Comment on the 2011 price increase was made under the PTG banner.
No price increase was granted for 2011 due to the drop in the CPI and the strengthening of the
Rand.
Comment on the 2012 price increase was again submitted through the PTG. A 2.14% price
increase was announced in January 2012.
Registration Delays - The survey conducted to determine the status of the backlog of medicines
registration was channeled through the PTG which presented a proposal to the Medicines
Control Council (MCC) in November 2011. Constructive proposals were included in the
presentation. A follow-up collaborative study between industry and the MCC was agreed for
2012.
Transformation
The support programme to help members embrace transformation and obtain a B-BBEE rating
continued during 2011. A repeat of the benchmarking survey done annually since 2008 showed
that PIASA membership made steady progress with their B-BBEE status.
Skills Development
In order to address the shortage of skills in the pharmaceutical industry, a dedicated Skills Group
was established early in 2011. A membership survey was undertaken to establish priorities in skills
shortages. As a result, PIASA engaged with the development and accreditation of a
representative learnership course. The accreditation of service providers by the Pharmacy
Council remains an obstacle to the full implementation of this programme. Regulatory
pharmacists were established to be a further priority for both the private sector and the MCC.
Concept papers have been developed at the request of Ms Hela and will be presented to her in
2012.
Health Outcomes
Medical Schemes The 2nd phase of the project dealing with medicine reimbursement started in
2011. This followed on the key findings of the 2009 study which highlighted incorrect application
of co-payments and deviations from the legal framework as set out in the Medical Schemes Act.
BHF/CMS legal action – Prescribed Minimum Benefits - PIASA and IMSA joined as Amicus Curiae
the case initiated by the Board of Healthcare Funders (BHF) and opposed by the Council for
Medical Schemes (CMS), for the limitation by medical schemes of their obligations to reimburse
Prescribed Minimum Benefits (PMBs). The BHF application was unsuccessful and was followed
by an unsuccessful appeal. BHF announced their intention to appeal to the Supreme Court of
Appeal (SCA) in June 2012.
9
Communications
Media coverage – Media coverage during 2011 was excellent and included topics such as
clinical trials in South Africa, regulatory harmonisation, pricing of medicines, international
benchmarking and PMB’s. The regular Medical Chronicle advertorial page, covering matters of
importance to the pharmaceutical industry and good news stories from member companies
were published 5 times. The website remained a priority as a communication tool with members
and as a repository of information, government regulation and PIASA submissions. Regular one-
on-one meetings were held with the media and resulted in strong relationships being built to the
advantage of PIASA.
Science and Technology (SciTech)
Clinical – The Clinical Working Group’s focus for 2011 was to promote South Africa as a key site
for clinical research and to deal with the legal issues affecting clinical trials. In co-operation with
the South African Clinical Research Association (SACRA), a project was established to realize the
first-mentioned objective.
Pharmacovigilance and Medical Information – A key achievement of this group, which is
responsible for staying abreast of pharmacovigilance reporting, was the updating of
requirements for all African countries which update is now available on the PIASA website. Work
was initiated and continues on the ‘best practice’ guidelines, while the Medical Information
group, in partnership, developed a best practice guideline for the provision of medical
information to healthcare professionals and consumers.
Quality Management – The Association continued to provide support to companies on audits in
risk management for non-manufacturing areas. A Cold Chain Forum was held to address the
development of technical standards and education.
Regulatory and Export – PIASA actively engaged with various African health authorities on
technical issues that proved to be problematic for member companies such as product labeling,
GMP inspection requirements in Eastern Africa and applications for registration. Substantial
attention was given to harmonisation in SADC countries.
A proposal to replace the package insert in medicine packs with the PIL was made to the
Registrar of Medicines.
Marketing
Governance – The MCA (Marketing Code Authority), responsible for driving the implementation
and governing of the Code, was launched on 1 September 2011.
Marketing Code – The Marketing Code was implemented on a pilot basis on 1 May 2011.
Extensive training programmes were done to allow companies to prepare for the full code
implementation.
International representation
PIASA remains on the Council of the International Federation of Pharmaceutical Manufacturers
and Associations (IFPMA).
PIASA represents members’ interests in Africa as a member of the NEPAD Business Foundation.
10
Membership
Applications – Three companies joined PIASA during 2011, i.e.: Acro (February), Allergan
Pharmaceuticals (February), GSK South Africa (July) and Nkunzi Pharmaceuticals (September).
Resignations – AHN Pharma resigned from PIASA in July 2011 as the company was absorbed into
Aspen.
Member subscription fees - At the Annual General Meeting held in August 2010 it was agreed to
increase the PIASA subscriptions by 6% for 2011.
Industry consolidation - The matter of consolidation with IMSA remained unresolved.
Honorary Life Membership - No Honorary Life Membership of PIASA was awarded in 2011.
Thanks
We thank members of the Executive Council, the Management Council, Head’s and members of
the various Committees for their hard work, commitment, support and dedication to the affairs of
PIASA. Thank you also to member companies and their employees who participated so willingly in
the activities of the Association during the year.
We also thank our staff at the PIASA Secretariat for another year of hard work.
Details on the PIASA finances can be found under the Financial Report on page 25
11
Strategic Meetings
A strategic meeting, involving all members, was held on 2 and 3 November 2012.
The purpose of the meeting was to review the key issues facing industry, determine industry
trends; analyse and develop interventions, decide on actions and resource plans and to review
the reason that PIASA exists.
In doing so discussions focused on what industry wanted, what government demands, what the
public needs and what funders are after.
The ultimate objective was described as:
• Work towards industry alignment to create a common view around the end game, and to
create a favorable economic, regulatory and political environment
• Work towards a single industry organisation as a gradual process over the next 5 years
• To fulfill a leader advocacy role
• Create an appreciation of the value of medicine
• Focus on influencing initiatives using more outcomes or other data based motivations
•
• Rebuild industry credibility
• Proactively identify and facilitate responses to concerning trends early
• Gaining a better understanding of Government’s pain points and “How we can help
them”
• Influencing decision making away from purely price based criteria and towards more
value adding ones
• Assist in facilitating an alignment between the DST, DTI and the DoH
These objectives will result in: the creation of jobs; a clear compelling relevant and unified single
Pharma voice to negotiate with government and other stakeholders; address governments needs
while furthering the economic growth of the pharmaceutical industry and patient access to
medicines; transformation of the industry; B-BBEE; skills development and a good voice with
government.
A follow up meeting was held in February 2012 to determine specific actions arising from the
discussions at the November 2011 meeting.
12
Committees to the Exco
Government Affairs and Policy Chair: Steve Speller (Servier)
Most of the work done by this group related to pricing matters, with international benchmarking
remaining an unresolved issue. In order to present a single industry position to government, the
work was coordinated though the Pharmaceutical Task Group (PTG), a grouping of associations
involved in pharmaceutical matters i.e. PIASA, Innovative Medicines of South Africa (IMSA),
Pharmaceuticals Made in South Africa (PHARMISA) and the Self Medication Association of South
Africa (SMASA). The National Association of Pharmaceutical Manufacturers (NAPM) withdrew
from the PTG during the year. This grouping of associations represents multinational, generic and
self-medication interests.
Constructive proposals were made and submissions developed in response to legislative issues,
supported by face-to-face presentations when possible.
National Health Insurance
Work on Government’s intended National
Health Insurance system continued during
2011.
In 2010, PIASA finalised a resource document
on pharmaceuticals within a national health
system in anticipation of a call for comments.
Anchor principles adopted in this document
included the support of universal access to
quality medicines, the need for a strong and
stable locally-based pharmaceutical industry
and a mandatory funding system for
medicines. The document was revised and
updated before submission.
Even though pharmaceuticals were not
addressed in detail in the Green Paper
published on 12 August 2011, PIASA made
use of this opportunity to submit comment on
pharmaceuticals. Comment was submitted
on 23 December 2011.
There is no clarity on how benchmarking will
fit into the NHI vision.
International Benchmarking
A submission was made in response to the
draft Methodology on International bench-
marking, published on 25 March 2011. The
submission was made through the PTG. The
closing date for comment was 11 July 2011.
Government appears to remain committed
to the principle of the lowest in the basket.
Arguments countering this position will be
made in an attempt to highlight the
importance of product portfolio and factors
that affect price.
PIASA’s concern remains that the
application of ‘the lowest’ rule across the
board, such as proposed for phase two,
might have the effect of forcing
pharmaceutical companies to drop some
of their marginal and low volume products
from the market in South Africa.
This might lead to the market becoming less
than sustainable which will in turn have very
significant negative implications for patient
access.
13
Pricing of Medicines
Annual increase in the SEP
Although a submission was made on the
proposed 2011 price increase, under the PTG
banner, no price increase was granted for
2011 because of the strengthening of the
Rand and the lower Consumer Price Index
during that period.
The PTG submitted comment on the Price
Increase for 2012 on 17 November 2011. A
price increase of 2.14% was announced on
19 January 2012 (Government Gazette
34959).
Registration Delays
The backlog in registrations remains
unresolved.
Feedback from the Department of Health
(DoH) suggested that it would take 3 years to
get the SA Health Products Regulatory
Authority (SAHPRA) up and running.
PIASA conducted a survey of the registration
status across its membership and that of IMSA
members as well as Aspen.
Industry met with Ms Hela, Registrar of the
Medicines Control Council (MCC), on 24
November 2011 and presented the
outcome of the survey. The survey was
accompanied by an analysis of problems as
well as constructive suggestions as to how
to solve some of the issues contributing to
the backlog.
A presentation was made to the Council
following the offer by Ms Hela for an
opportunity to put forward our position.
Action to embark on further research was
agreed.
Social Compact
The social compact proposed by the PTG in
2009 – as an alternative to benchmarking of
medicine prices - was halted as it was
considered to be an inappropriate tool.
Logistics Fee
A submission was made by PTG on 3 May
2011 in response to Government Gazette
34071 published on 4 March 2011. To date
no resolution has been received from
Government.
Summary of important dates:
19 Jan 2012 - 2012 Price Increase announced, Government Gazette 34959
23 Dec 2011 - PTG comment on NHI Policy Green paper
17 Nov 2011 - PTG comment on the Price Increase for 2012
19 August 2011 - Single Exit Price adjustment for 2012, Government Gazette 34537
12 August 2011 - National Health Insurance Policy Green Paper, Government Gazette 34523
12 May 2011 - PTG submission on Logistics Fee, Government Gazette 34071
25 March 2011 - International Benchmarking of Medicine Prices Methodology, Government Gazette 34141
4 March 2011 - Regulations relating to Pricing System Logistics , Government Gazette 34071
24 Jan 2011 - Regulations re SEP Price Adjustment for September, Government Gazette 33961
17 Dec 2010 - International Benchmarking of Medicine Prices Methodology, Government Gazette 33878
15 Sept 2010 - PTG presentation to the SEP Methodology.
21 July 2010 - Resource document on NHI adopted by the PIASA Executive Council on 21 July 2010. 17 March 2010 - Price increase for 2010 announced, Government Gazette 33034
19 Feb 2010 - Second Industrial Policy Action Plan published
Government Affairs and Policy Committee Members (from July 2011): Steve Speller - Chairperson (Servier), Vicki St
Quintin (PIASA). Guni Goolab (AstraZeneca), Saras Rosin (AstraZeneca), Dudu Ndlovu (Adcock Ingram), Mohammed
Majid (Allergan), Barry Wren (Covidien), Kobus Venter (Janssen), William Elliot (Merck), Ashley Pearce (MSD), Timothy
Kedijang (Novo Nordisk)
Committee Members (August 2010 – July 2011): Steve Speller - Chairperson (Servier), Vicki St Quintin (PIASA). Guni
Goolab (AstraZeneca), Jonathan Louw (Adcock Ingram), Barry Wren (Covidien), Irwin Jukes (iNova), Kobus Venter
(Janssen), Ashley Pearce (MSD), Billy van der Merwe (MSD), Timothy Kedijang (Novo Nordisk)
PIASA Representatives to the PTG: PIASA representatives to the PTG (from August 2011): Steve Speller (Servier),
Ashley Pearce (MSD), Guni Goolab (AstraZeneca) and Vicki St Quintin (PIASA).
14
Transformation Chair: Amanda Wilde (Umsinsi Health) and Vicki St Quintin (PIASA)
The Transformation Committee’s main focus is an industry vision for transformation and
encouraging members to embrace Broad-Based Black Economic Empowerment (B-BBEE).
During 2011 PIASA maintained an enabling environment for transformation within the industry.
Benchmarking Survey
A repeat of the Benchmarking Survey done
in 2008 and 2009 was undertaken for 2010.
The survey for year 2010, completed at end
May 2011, showed that the membership had
made steady progress with their B-BBEE
status. New targets for 2011 were set.
According to the study results, 8 member
companies held verification ratings and 5
companies had done self-assessments.
BEE Amendment Bill
GG34845, 9 Dec 2011
There were some significant changes in the
BEE Draft Amendment Bill which was
published for comment late 2011.
Preferential Policy Framework Act
GG34350, 7 December 2011
This Act will significantly affect the
Pharmaceutical Industry as it seeks to give
preference to products manufactured in
South Africa.
In order for this to happen, the
pharmaceutical industry has been
designated and certain tenders and
products within those tenders will fall under
the requirement for 70% of the volume to be
procured from local manufacturers.
This Act brings the tendering system into line
with the B-BBEE objectives.
B-BBEE Charter
A draft B-BBEE Charter was developed by
consultant, Robin Woolley of Transcend
Corporate Advisors.
This document consists of transformation
imperatives, current B-BBEE status and
objectives and actions to achieve in 2012.
Website
A section was added to the PIASA website
where member companies and their
suppliers can load their scorecards.
Member Support Programme
PIASA’s support programme which assists
members with the implementation of BEE
continued during 2011.
PIASA supports members on an individual
basis with the assistance of Robin Woolley
from Transcend who is assisting member
companies directly, as part of his contract
with PIASA.
Three successful Transformation breakfast
meetings were held:
2 August – Transformation and empowerment
A brief synopsis of the journey in terms of the
Code, benchmarking changes in 2012 and
the vision of what we are trying to achieve
was discussed.
From this meeting emanated a short and
clear Policy Statement which captures
where we were, where we are and where
we are going.
15
7 October 2011 – Tools for preparing for
Rating.
Members were given guidance as far as the
preparation for rating is concerned.
4 November 2011 – Enterprise Development
& Preferential Procurement Policy
Framework Act
Focus was on how members should
structure themselves in the light of the new
targets.
Summary of important dates:
9 Dec 2011 - Draft BEE Amendment Bill published
7 Dec 2011 - Preferential Policy Framework Act came into effect, GG34350, 8 June 2011
4 Nov 2011 - PIASA Breakfast on Enterprise Development & Preferential Procurement Policy Framework
7 Oct 2011 - PIASA Breakfast meeting – tools for preparing for rating
2 Aug 2011 - PIASA Breakfast meeting – transformation and empowerment
May 2011 - PIASA benchmarking survey completed for 2010
April 2010 - PIASA benchmarking survey completed for 2009
14 Oct 2009 - PIASA Workshop: Practical actions companies should be doing in the last 2 months
of the year to ensure transformation and BEE initiatives are well positioned at year end
26 May 2009 - PIASA Workshop: B-BBEE status, Audit preparation and collecting supporting evidence
Committee members:
Meeting Attendees (from July 2011): Amanda Wilde (Umsinsi Health Care) - Chairperson, Vicki St Quintin (PIASA), Robin
Woolley (Transcend Corporate), Henri Louw (Abbott Laboratories), Angela Conway (ACRO), Estelle Carstens (Alcon),
Precious Thaba (Adcock Ingram), Tebatso Matshego (AstraZeneca), Annacletta Khumalo (AstraZeneca), Jenny Wright
(Galderma), Yvette Gengan (Galderma), Lorrayne Duweke (MSD), Cheryl Muller (MSD), Rowan Smith (Merck), Ayanda
Magubane (Merck), Adelha Rodha (Merck), Adel Klut (Servier), Hloni Mphahlele (Umsinsi Health Care) and Thomas
Mphahlele (Umsinsi Health Care).
Meeting Attendees (from August 2010 to July 2011): Amanda Wilde (Umsinsi Health Care) – Chairperson, Vicki St Quintin
(PIASA), Charlotte Rampete (Abbott Laboratories), Thomas Mphahlele (Adock Ingram), Jenny Wright (Galderma), Yvette
Gengan (Galderma), Billy vd Merwe (MSD), Adel Klut (Servier), Robin Woolley (Transcend Corporate Advisors), Hloni
Mphahlele (Umsinsi Health care) .
16
Skills Development Leader: Vicki St Quintin (PIASA). Rotating Chair The Skills Development Working group was established during 2011 to address the shortage of
skills in the pharmaceutical industry. A lot of work was done by this group which engaged with
stakeholders such as CHIETA, Pharmacy Council and various Training Service Providers.
A section on Skills Development was added to the PIASA website where members can access
information and contacts for skills development.
PIASA undertook a membership survey to determine the areas of need and expectations. Two
key areas were identified i.e.: Learnerships for representatives and Regulatory Pharmacists
Training.
Representative Learnership Training
Despite many hurdles good progress was
made with the development of a represen-
tative learnership course. The course was
registered in June 2011. There remain
blocks to the implementation of the course
as the service providers are awaiting
accreditation from the Pharmacy Council.
CHIETA has given significant assistance to
PIASA.
A workshop held on 25 November 2011 on
representative learnership training was
deemed to be valuable and successful.
Speakers and topics covered were:
Pharmaceutical Sales Representation -
Qualification and Learnership, (Peter
Henning, Consultant)
Qualifying the Learnerships from a
Provider Perspective, (The Smart Group,
Coralie Rutherford)
Funding the Learnerships - Discretionary
Grants, (CHIETA, Moshe Mokgalane)
Sources of Learners – a unique national
source, (Student Village, Fay Humphries).
A skills road show will be arranged in-house
to assist member companies with their
learnership programmes in 2012.
Regulatory Pharmacist Training
Early in 2011 Ms Hela (DoH) mentioned an
interest in a course/qualification for
regulatory pharmacists because of the
acute shortage of these pharmacists in
government.
PIASA approached the Tshwane University of
Technology (TUT) to discuss the opportunities
for the development of a regulatory
pharmacist’s course. TUT representatives
met with the PIASA regulatory group to
discuss the challenge, but no significant
progress has yet been made.
Concept papers have been developed at
the request of Ms Hela and these will be
presented to her in 2012.
Objectives 2012
The groups focus for 2012 include:
identifying additional training providers
and help those that need assistance in
becoming accredited for the Medical
Sales Representative qualification and
learnership, and
Revisiting and conducting another
member survey.
Summary of important dates:
25 Nov 2011 - Workshop on Representative Learnership
13 June 2011 - Establishment of Skills Development Group – first meeting
Committee members:
Meeting Attendees (from June 2011): Vicki St Quintin (PIASA) – Chairperson, Hendrik Louw (Abbott), Charlotte Rampete
(Abbott), Gina Partridge (Abbott), George Madisha (Adcock Ingram), Estelle Carstens (Alcon), Angela Conway (ACRO),
Yvette Gengan (Galderma), Gail Crichton (Janssen), Cheryl Muller (MSD), Lorrayne Duweke (MSD), Ayanda Magubane
(Merck), Adel Klut (Servier), Thomas Mphahlele (Umsinsi Healthcare) and Peter Henning (consultant)
17
Health Outcomes/Policy
Chair: Laura Engelbrecht Joubert (Abbott)
Most of the work done by the Health Outcomes Committee centered on the BHF/CMS Court
Case, PMB’s and Medical Schemes.
BHF/CMS Challenge on Prescribed Minimum
Benefits (PMBs)
BHF entered into legal action on Regulation
8(1) of the General Regulations under the
Medical Schemes Act, 131 of 1998. Their
objective was to allow medical schemes to
limit reimbursement of (PMBs) according to
scheme rules rather than paying in full
against an invoice.
PIASA addressed this by becoming an
Amicus Curiae in co-operation with IMSA.
The objective was to raise constitutional
issues with regards to the rights of the
patient.
BHF has lost at all stages of their challenge
i.e. application for interim relief, 01
December 2010; judgement 14 May 2012
and appeal 07 November 2011.
BHF have indicated their intention to appeal
to the Supreme Court of Appeal (SAC)
which matter has yet to be heard.
PMB’s and Medical Schemes
The first phase of the case study project, to
assess medicine reimbursement, started in
2009. The project was outsourced for
reasons of data confidentiality and
completion.
The second phase of this project, which
focused on medicine reimbursement,
commenced in 2011. Interim results will be
presented in February 2012 where after the
project would continue with the next interim
results due in mid-2012.
Summary of important dates:
30 March 2011 - Draft guidelines for pharmacoeconomic submissions
Committee members:
From July 2011: Chairperson: Laura Engelbrecht Joubert (Abbott). Tom Molokoane (Abbott Laboratories), Vaychel
Raman (Adock Ingram), Mohammed Majid (Allergan), Glen Watkins (Bayer Schering), Magriet de Wet (Key
Oncologics), Lucia Ludick (Janssen), Abeda Williams (Janssen), Rowan Smith (Merck), Wendy Lindeque (MSD), Andri
Vorster (MSD), Hennie Duvenhage (Novo Nordisk), Elsabe Klinck (EK Consulting) and Kirti Narsai (PIASA).
From August 2010 to July 2011: Kirti Narsai (PIASA) - Chairperson, Tom Molokoane (Abbott Laboratories), Jackie
Ramasodi (Abbott Laboratories), Vaychel Raman (Adock Ingram), Mohammed Majid (AstraZeneca), Glen Watkins
(Bayer Schering), Shamim Kader (Janssen-Cilag), Lucia Ludick (Janssen-Cilag), Abeda Williams (Janssen-Cilag), Rowan
Smith (Merck), Simon Rakgwale (Merck), Wendy Lindeque (MSD), Billy vd Merwe (MSD), Andri Vorster (MSD) and Hennie
Duvenhage (Novo Nordisk).
18
Communications Chair: Richard de Chastelain (Bayer Health Care)
The main focus of this group is to raise the profile of PIASA and its members, to communicate with
members and key stakeholders, to build and maintain a relationship with the media and to deal
proactively with the media.
Media
The bi-monthly advertorial pages published
in the Medical Chronicle, continued during
2011. The purpose of these advertorials is to
elevate the image of PIASA with the key
stakeholder group, i.e. the medical
profession. The advertorials offer the
opportunity to communicate current PIASA
news and research reports, to showcase the
membership, their Corporate Social
Investment and transformation activities
and progress, as well as other issues of
importance to the pharmaceutical industry.
A great deal of effort was put into
communications activities with good media
coverage received. Coverage is obtained
through dissemination of PIASA press
releases, relationship-building with journalists
and by taking advantage of opportunities
for exposure by participating in special
features in various both local and
international publications. Participation as
speakers in relevant forums offers further
opportunity for PIASA to be seen as a
thought leader.
Media coverage was excellent and
included topics such as: Regulatory
Harmonisation (published on the WHO
website), promoting South Africa as an ideal
destination for Clinical Trials, Pricing of
Medicines emphasizing the value of the
medicines and the savings they bring
throughout the healthcare chain,
International Benchmarking, PMB’s,
authorized generics, and comment on the
CMS Annual Report on how medicines’
spend is being well contained.
A number of one on one meetings took
place to brief the media and give them a
better understanding of the
pharmaceutical industry and the issues
affecting the industry.
PIASA Website
Updating information on the PIASA website
remained a priority as the website is
intended to be a resource for up to date
information on relevant industry topics and
contain useful information on:
Government Legislation and Regulation
(includes Government Gazettes)
Submissions and comment on legislation
and regulations
Code of Marketing Practice
Transformation
Industry intelligence and market data
Events taking place
Latest news by member companies
Latest media news
The closed section of the website houses
minutes of meetings and other internal
information.
Corporate Image
PIASA’s corporate identity was refreshed to
offer a more modern feel. The new image
represents research, wellness and medicines.
It was launched on 1 November 2011.
Media Monitoring
All news clippings received from the PIASA
subscription to a media monitoring service,
were posted to the PIASA website for easy
access by members.
Committee members:
From July 2011: Chairperson: Richard de Chastelain (Bayer Health Care), Pierre Bosch (Alcon Laboratories), Dudu
Ndlovu (Adcock Ingram), Debbie Schutte (Bespoke Communications), Dorothy Mwangu (MSD), Tsile Maswanganyi
(Merck) and Vicki St Quintin (PIASA).
From August 2010 to July 2011: Chairperson: Richard de Chastelain (Bayer Schering Pharma), Pierre Bosch (Alcon
Laboratories), Mike Mabasa (Adcock Ingram), Gugu Nyandeni (Adcock Ingram), Bridget von Holdt (Inzalo
Communication) and Vicki St Quintin (PIASA).
19
Committee for Science and
Technology (SciTech) Chair: Kobus Venter (Janssen)
The SciTech Committee, led by Kobus Venter (Janssen), mainly interprets and analyses
legislation, prepares comment and submissions on legislation, regulations or guidelines to
Government Departments and other stakeholders. The focus for 2011 was on Regulatory issues
and the Registration of Medicines. The different groups under SciTech have been very active
during 2011.
The Committee consists of four working groups i.e.: Regulatory and Export, Pharmacovigilance
and Medical Information, Quality Management and Clinical Affairs.
Clinical Working Group Chair: Linda Roach (Janssen)
The Clinical Working Group’s focus for 2011 was to market South Africa as a key site for clinical
research, to deal with the legal issues affecting clinical trials and to improve the efficiency of the
regulatory environment.
Much of the working group’s attention was directed toward clinical trial regulatory issues,
development of marketing packs and establishing relationships with key decision makers.
South Africa for Clinical Research
PIASA, in collaboration with SACRA,
embarked on a project to market South
Africa as a destination of choice for Clinical
Trials.
The project consists of the development of
a website promoting South Africa as a key
site for clinical trials to all stakeholder
groups.
Various companies/stakeholders approved
of this project and contributed financially.
Funds were successfully raised for the
implementation of the project.
Clinical Research Regulatory Barriers Survey
The survey on regulatory barriers in clinical
research, done in 2010, was completed by
80 respondents across various job functions,
and mostly by SACRA members.
Results were compiled and presented at
the SACRA Conference held on 22 & 23
September 2012. The results showed
significant differences in review and
approval times for clinical trials protocols
and amendments between ethics
committees and the MCC.
ACRP Conference:
An abstract submission on challenges and
opportunities of conducting clinical trials in
South Africa was accepted for
presentation at the ACRP Conference in
Houston, Texas in 2012.
Legal Issues
The submission for dispensing license
regulations was finalised on 30 November
2011.
Summary of important dates:
8 June 2011 - Barriers to clinical research report
30 Nov 2011 - Dispensing licenses for clinical trial setting PIASA & SACRA joint submission
5 July 2011 - Draft taxation laws amendment bill re R&D tax incentives
20
Regulatory and Export Working Group Chair: Abeda Williams (Janssen)
PIASA actively engaged with various African Health authorities on technical issues that proved
to be problematic for member companies, e.g. Namibian, Zambian, Malawi and Zimbabwe
product labeling, GMP inspection requirements in EAC (Eastern Africa Community) and
Common Technical Documents (application for registration).
Substantial attention was given to Harmonisation in SADC countries. The South African
backlog in medicine registration remains a priority area for this group.
African Medicines Registration
Harmonisation
PIASA had meetings with the World Health
Organisation (WHO) and NEPAD Business
Foundation on harmonisation of medicine
registration.
At the SADC meeting held in Malawi on
2 May 2011 the industry position was
presented by PIASA i.e.:
harmonisation of regulatory
requirements to ICH requirements
countries should have the power to
make available quality medicines to
protect their population from sub-
standard or counterfeit medicines
harmonisation of labeling requirements
to be implemented
harmonising standards
creating recognition agreements or
other means of assessing dossiers
putting laws in place to control
medicine in all countries
The outcome was very positive in that
Industry will become more involved.
PIASA commented extensively on the
SADC business plan.
A country specific labeling survey will be
performed with PIASA members to
determine the extent of the problem to be
used to engage health authorities in Africa.
Considerable effort was put into
harmonisation in SADC countries as far as
common technical documents, guideline
status, labeling, stability, application
inspections, batch records and registration
status is concerned.
Regulatory Barriers in Africa
Companies provided examples of issues
raised by regulatory authorities that are
barriers to market entry. The report by
PIASA on the regulatory barriers to
medicine was published on the WHO
(World Health Organisation) website.
PIASA did a presentation to the WHO and
World Bank on regulatory barriers in Africa.
Common Technical Document (CTD)
PIASA obtained training material on CTD
from the WHO. CTD training in Zimbabwe
with WHO took place.
GMP inspections by EAC countries
An EAC submission for co-ordination of
GMP inspections was done.
Backlog in Medicine Registration
PIASA continued to pursue the backlog in
medicine registration and the impact
thereof on the industry.
Another survey was conducted to
investigate the extent of the backlog.
According to the survey the backlog was
increasing. The increasing backlog was
taken up with the Pharmaceutical Task
Group (PTG) which presented a proposal
to the Medicines Control Council in
November 2011.
A follow-up collaborative study between
industry and the MCC will be done in 2012.
21
Medicine Registration Authority
Our concerns re the difficulties with
Medicine Registration were once again
raised with the ITG (Industry Task Group) and
the Registrar.
PIL’s
A proposal for replacing the package insert
with the PIL in the pack was forwarded to
the Registrar of Medicines.
Training programme for regulatory staff
Several meetings took place with the
University of Tshwane on developing a
training programme for regulatory staff,
specifically pharmacists, regulatory
assistants, MRA Staff and for students with
life science qualifications.
Summary of important dates:
31 Jan 2011 - Namibian post registration amendment guidelines
10 Aug 2011 - SADC proposal on regulatory harmonisation
Pharmacovigilance and Medical Information Chair: Abeda Williams (Janssen)
The Pharmacovigilance and Medical Information working group is responsible for staying
abreast of pharmacovigilance reporting and for promoting the use of international
pharmacovigilance reporting standards in South Africa and other African countries.
The Medical Information working group focuses on best practice for medical information
centers.
African Pharmacovigilance Guidelines
The group updated the database of all
pharmacovigilance reporting
requirements for African Countries. The
latest version is available to members on
the PIASA website.
Medical Information guideline
The medical information guideline was
updated. PIASA partnered with Amayesa
Medical Information Centre to establish a
best practice guideline for the provision of
medical information to healthcare
professionals and consumers.
Good Pharmacovigilance Practice
Guideline
Topics for the best practice guideline were
finalised and a working group was
established to prepare the content.
SR-PINS
PIASA provided guidelines to companies
with regards to Pharmacovigilance
orientation and awareness.
Summary of important dates:
5 April 2011 - PIASA medical information guideline
15 May 2011 - Africa adverse event report guideline
22
Quality Management Working Group Chair: Suzanne Roe (Alcon Laboratories)
This group addresses the issues related to quality of products in South Africa and Africa.
Risk Management
The risk management project for non-
manufacturing areas to support
companies for audits continued in 2011.
Cold Chain Management
PIASA convened a Cold Chain Forum with
groups across all stakeholders involved in
cold chain management.
The main objective of the group is to raise
the standard of Cold Chain Management
through the development of technical
standards and education.
Counterfeit Medicines
The PIASA position paper on Counterfeit
Medicines was updated and published on
the PIASA website in November 2011.
Summary of important dates:
1 Nov 2011 - PIASA counterfeit medicines position paper
SciTech Committee members:
From July 2011: Chairperson: Kobus Venter (Janssen), Suzanne Roe (Alcon Laboratories), Abeda Williams (Janssen),
Linda Roach (Janssen), Lynette Terblanche (MSD) and Kirti Narsai (PIASA).
From August 2010 to July 2011: Chairperson: Kobus Venter (Janssen-Cilag), Suzanne Roe (Alcon Laboratories),
Abeda Williams (Janssen-Cilag), Lynette Terblanche (Schering-Plough), and Kirti Narsai (PIASA).
SciTech members were supported by a large number of people drawn from member companies.
23
Marketing Committee Chair: Steve Speller
PIASA’s Marketing Code Committee, chaired by Steven Speller (Servier), continued to
participate actively on the Marketing Code Steering Committee and Marketing Code
Authority Interim Board, both of which are working towards the implementation of the SA
Marketing Code.
Governance
The MCA (Marketing Code Authority) was
launched on 1 September 2011. The
Authority is independent and responsible
for driving implementation and
governance of the Code.
1 A number of Associations i.e. PIASA,
IMSA, PHARMISA, SADLA, SAAHA, SAMED,
SMASA combined resources to establish
the Authority.
The functions of the MCA are to:
Ensure awareness of the Code
Maintain and enforce the Code and
Guidelines
Provide advice and training on the
Code and to
Deal with marketing complaints.
Marketing Code
The Marketing Code was implemented on
a pilot basis on 1 May 2011.
Companies and MCA engaged in
extensive training programmes and PR
around the code to increase code
awareness and to allow companies to
prepare for full code implementation.
Training
Training material, which included a
detailed training manual as well as an e-
learning program was made available to
companies.
Members started training, through the e-
learning programme, early in 2011.
Two training sessions were held.
The first training session took place on
27 September 2011. Four hundred persons
attended.
The second training session was held on
25 November 2011 and was again well
attended.
Compliance
The Associations, including PIASA, agreed
to bind its members to the Code.
Committee members:
From July 2011: Steve Speller (Servier) – Chairperson. Abofele Khoele (Adcock Ingram), Gina Partridge (Abbott), Barry
Wren (Covidien), Abeda Williams (Janssen), Michael de Villiers (Novo Nordisk), and Kirti Narsai (PIASA).
August 2010 to July 2011: Steve Speller (Servier) – Chairperson. Members: Abofele Khoele (Adcock Ingram), Barry
Wren (Covidien), Abeda Williams (Janssen-Cilag), Lynette Terblanche (MSD) and Kirti Narsai (PIASA).
1 Abbreviations: PIASA (Pharmaceutical Manufacturers Association of SA), IMSA (Innovative Medicines SA), PHARMISA
(Pharmaceuticals Made in SA), SADLA (Southern Arica Laboratory Diagnostics Association) SAAHA (South African Animal Health
Association), SAMED (SA Medical Device Industry Association), SMASA (Self-Medication Manufacturers Association of SA).
24
Annual Financial Statements
Pharmaceutical Industry Association of SA
For the year ended 31 December 2011
Contents Page
Directors’ Responsibilities and Approval…………………
Independent Auditor’s Report ……………………………
Directors’ Report …………………………………….………
Statement of Financial Position ……………………..……
Statement of Comprehensive Income …………………
Statement of Changes in Reserves ………………………
Statement of Cash Flows ……………………….………….
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 Income Statement ....……………..
26
27
28-29
30
30
31
31
32-37
38-43
43-44
Level of assurance
These annual financial statements have been audited in compliance
with the applicable requirements of the Companies Act, 71 of 2008.
Preparer: MF Klinkert CA(S.A), RA
25
Directors’ Responsibilities and Approval
The directors are required in terms of Companies Act, 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 association 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 the International Financial Reporting Standard for Small and
Medium-sized Entities. The external auditors are engaged to express an independent opinion on
the annual financial statements.
The annual financial statements are prepared in accordance with the International Financial
Reporting Standard for Small and Medium-sized Entities and are based upon appropriate
accounting policies consistently applied and supported by reasonable and prudent judgments
and estimates.
The directors acknowledge that they are ultimately responsible for the system of internal financial
control established by the association 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 association and all
employees are required to maintain the highest ethical standards in ensuring the association’s
business is conducted in a manner that in all reasonable circumstances is above reproach.
The focus of risk management in the association is on identifying, assessing, managing and
monitoring all known forms of risk across the association. While operating risk cannot be fully
eliminated, the association endeavors to minimize it by ensuring that appropriate infrastructure,
controls, systems and ethical behavior 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 association’s cash flow forecast for the year to 31 December
2012 and, in the light of this review and the current financial position, they are satisfied that the
association 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
asociation’s annual financial statements. The annual financial statements have been examined
by the association’s external auditors and their report is presented on pages 27 to 44.
The annual financial statements set out on pages 27 to 44 which have been prepared on the
going concern basis, were approved by the board on 4 July 2012 and were signed on its behalf
by:
_____________________________ _________________________________
Director Director
Johannesburg
4 July 2012
26
Independent auditor’s report
To the members of the Pharmaceutical Industry Association of South Africa NPC
We have audited the annual financial statements of the Pharmaceutical Industry Association of South
Africa (NPC), which comprise the statement of financial position at 31 December 2011, and the
statement of comprehensive income, statement of changes in reserves and statement of cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory
notes, and the directors’ report, as set out on page 28.
Directors’ Responsibility for the Annual Financial Statements
The association’s directors are responsible for the preparation and fair presentation of these annual
financial statements in accordance with the International Financial Reporting Standard for Small and
Medium-sized Entities, and requirements of the Companies Act, 71 of 2008, and for such internal
control as the directors determine is necessary to enable the preparation of annual 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 annual 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 annual 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 annual financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the annual financial statements present fairly, in all material respects, the financial
position of the Pharmaceutical Industry Association of South Africa (NPC) as at 31 December 2011,
and its financial performance and its cash flows for the year then ended in accordance with the
International Financial Reporting Standard for Small and Medium-sized Entities, and the requirements
of the Companies Act, 71 of 2008.
Emphasis of Matter
Without qualifying our opinion we draw attention to note 3 of the directors’ report, relating to events
subsequent to year end.
Supplementary Information
Without qualifying our opinion, we draw attention to the fact that supplementary information set out
on pages 43 to 44 does not form part of the annual financial statements and is presented as
additional information. We have not audited this information and accordingly do not express an
opinion thereon.
Nolands Jhb Inc.
Registered Auditors, Practice number: 905119, Per: DW Fordham CA (S.A), RA
Johannesburg, 4 July 2012
27
Directors’ report
The directors submit their report for the year ended 31 December 2011.
1. Review of activities
Main business and operations
The association carries on the business of a trade association of companies involved in the
manufacture and/or marketing of prescription medicines in South Africa and operates
principally in South Africa.
The operating results and state of affairs of the association are fully set out in the attached
annual financial statements and do not in our opinion require any further comment.
There was no major change in the nature of the business.
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 realization 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 the 2012 financial period two large members have resigned from the association, thus
reducing invoicing below budgeted spend for 2012.
4. Property, plant and equipment
There have been no major changes in the property, plant and equipment during the period
or any changes in the policy relating to their use.
5. Directors
The directors of the association during the year and to the date of this report are as follows:
Name Changes
J Louw
G Goolab
RA De Chastelain
AM Pearce Resigned 23 November 2011
PM Bosch
JD Venter
AJ Wilde
JM Wright Resigned 6 July 2011
SR Speller
BA Wren Resigned 6 July 2011
L Joubert Appointed 6 July 2011
M De Wet Appointed 6 July 2011
T Kedijang Appointed 6 July 2011
K Boehm Appointed 6 July 2011
28
6. Secretary
The secretary of the company is RAiN Accountants of:
Business Address 2nd Floor
Illovo Edge
Corner Fricker Road and Harries Road
Illovo
2121
Postal Address PO Box 1002
Parklands
2121
7. Auditors
Nolands Jhb Inc. will continue in office in accordance with section 90 of the Companies
Act, 71 of 2008.
29
Statement of Financial Position Note 2011 2010
R R
Assets
Non-Current Assets
Property, plant and equipment 2 291 830 268 630
Intangible assets 3 30 890 46 333
Other financial assets 4 62 513 117 422
385 233 432 385
Current Assets
Current portion of other financial assets 4 24 000 9 091
Trade and other receivables 5 111 445 35 762
Prepayments 172 461 135 819
Cash and cash equivalents 6 7 336 605 7 306 712
7 644 511 7 487 384
Total Assets 8 029 744 7 919 769
Reserves and Liabilities
Reserves
Accumulated surplus 7 225 694 7 178 434
Liabilities
Non-Current Liabilities
Finance lease obligation 7 10 070 24 287
Current Liabilities
Finance lease obligation 7 14 440 12 144
Trade and other payables 8 567 511 420 774
Income received in advance 212 029 284 130
793 980 717 048
Total Liabilities 804 050 741 335
Total Reserves and Liabilities 8 029 744 7 919 769
Statement of Comprehensive Income Note 2011 2010
R R
Revenue 9 6 719 880 6 180 478
Other income 3 769 -
Operating expenses (7 140 162) (7 436 545)
Operating deficit 10 (416 513) (1 256 067)
Finance income 11 472 838 405 386
Finance expenses 12 (9 065) (2 269)
Surplus (deficit) for the year 47 260 (852 950)
Other comprehensive income - -
Total comprehensive surplus (deficit) 47 260 (852 950)
30
Statement of Changes in Reserves
Accumulated
surplus
R
Balance at 1 January 2010 8 031 384
Changes in reserves -
Total comprehensive deficit for the year (852 950)
Total changes (852 950)
Balance at 1 January 2011
7 178 434
Changes in reserves -
Total comprehensive surplus for the year 47 260
Total changes 47 260
Balance at 31 December 2011 7 225 694
Statement of Cash Flows Notes 2011 2010
R R
Cash flows from operating activities
Cash used in operations 15 (368 893) (1 054 506)
Finance income 472 838 405 386
Finance expenses (9 065) (2 269)
Net cash from operating activities 94 880 (651 389)
Cash flows from investing activities
Purchase of property, plant and equipment 2 (93 066) (44 102)
Movement in financial assets 40 000 (126 513)
Net cash from investing activities (53 066) (170 615)
Cash flows from financing activities
Movement in finance lease obligation (11 921) 36 431
Total cash movement for the year 29 893 (785 573)
Cash at the beginning of the year 7 306 712 8 092 285
Total cash at end of year 6 7 336 605 7 306 712
31
Accounting Policies The company is a South African registered company.
1. Statement of compliance
The annual financial statements have been prepared in accordance with the International Financial
Reporting Standard for Small and Medium-sized Entities, and the Companies Act, 71 of 2008.
The annual financial statements are presented in South African Rands, which is the association’s
functional currency.
1.1 Basis of preparation
The annual financial statements have been prepared under the historical cost basis and
incorporate the principal accounting policies detailed below.
These accounting policies are consistent with the previous period, except for changes set out in
note 16, First-time adoption of the International Reporting Standard for Small and Medium-sized
Entities.
1.2 Underlying concepts
The financial statements are prepared on the going concern basis using accrual accounting.
Assets and liabilities and income and expenses are not offset unless specifically permitted by an
accounting standard or interpretation.
Financial assets and financial liabilities are offset, and the net amount reported only when a
current legally enforceable right to offset the amounts exist and the intention is either to settle on
a net basis or to realise the asset and liability simultaneously.
Changes in the accounting policies are accounted for in accordance with the transitional
provisions in the standard. If no such guidance is given, they are applied retrospectively – unless it
is impracticable to do so, in which case they are applied prospectively.
Changes in accounting estimates are recognised prospectively by including the change in profit
or loss in the period of the change and future periods, if it affects both.
Prior period errors are retrospectively restated unless it is impracticable to do so, in which case
they are applied prospectively.
Accounting policies are not applied when the effect of applying them would be immaterial.
1.3 Recognition of assets and liabilities
Assets are only recognised if they meet the definition of an asset, it is probable that future
economic benefits associated with the asset will flow to the group and the cost or fair value can
be measured reliably.
Liabilities are recognised if they meet the definition of a liability, it is probable that future
economic benefits associated with the asset will flow from the company and the cost or fair value
can be measured reliably.
Financial instruments are recognised when the entity becomes party to the contractual provisions
of the instrument.
Financial assets and liabilities as a result of firm commitments are only recognised when one of the
parties has performed under the contract.
Regular way purchases and sales are recognised using trade date accounting.
32
Derecognition of assets and liabilities
Financial assets or parts thereof are derecognised when the contractual rights to receive cash
flows have been transferred or have expired or if substantially all the risks and rewards of
ownership have passed.
Where substantially all the risks and rewards of ownership have not been transferred or retained,
the financial assets are derecognised if they are no longer controlled. However, if control in this
situation is retained, the financial assets are recognised only to the extent of continuing
involvement in those assets.
The gain or loss arising from the derecognition of an asset is included in the profit or loss when the
item is derecognised. The gain arising from the derecognition of an asset is determined as the
difference between the net disposal proceeds, if any, and the carrying amount of them.
Financial liabilities are derecognised when the relevant obligation has been discharged or
cancelled or has expired.
1.4 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.
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 or property, plant and
equipment, the carrying amount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located is also included in the cost of property, plant and equipment.
All other repairs and maintenance are charged to the income statement during the financial
period in which they incurred. Plant and equipment is carried at amortised cost, being the cost of
the asset less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
Depreciation is calculated on the straight-line method to write off the cost of each asset to their
residual values over their estimated useful lives. The depreciated rates applicable to each
category of property, plant and equipment are as follows:
Item Depreciation rates
Computer equipment 33,33%
Furniture and fittings 15,00%
Office Equipment 25,00%
Leasehold improvements 20,00%
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance date. An asset’s carrying amount is written down immediately to its recoverable amount
if the asset’s carrying amount is estimated to be greater than its estimated recoverable amount.
Property, plant and equipment as acquired in terms of finance agreements are capitalised at the
cash purchase price thereof, interest being amortised over the period for which the finance has
been obtained.
The depreciation charge for each period is recognised in profit or loss unless it is included in the
carrying amount of another asset.
33
The gain or loss arising from the derecognition of an item of property, plant and equipment is
included in profit or loss when the item is derecognised. The gain or loss arising from
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.
1.5 Impairment of tangible assets
At each balance sheet date, the company reviews the carrying amounts of the tangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of the cash generating unit to which the asset belongs.
Intangible assets with indefinite useful lives are tested for impairment annually, and whenever
there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing the
value in use, the estimated future cash flows are discounted to their present value using their pre-
tax discount rate that reflects the current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
1.6 Intangible assets
An intangible asset is recognised when:
It is probable that the expected future economic benefits that are attributable to the
asset will flow to the entity; and
The cost of the asset can be measured reliably.
Intangible assets are initially recognised at cost. The carrying amount of intangible assets is
reviewed for impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable.
The amortisation period and the amortisation method for intangible assets are reviewed at each
reporting period date if there are indicators present that there is a change from the previous
estimate.
The amortisation rate applicable to each category of intangible assets is as follows:
Item Amortisation Rate
Website costs 33,33%
1.7 Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred.
1.8 Provisions and contingencies
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.
34
The amount of a provision is the present value of the expenditure expected to be required to
settle the obligation.
Provisions are not recognised for future operating losses.
1.9 Revenue
When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction is recognised when the significant risks and rewards of
ownership are transferred to the buyer.
The outcome of a transaction can be estimated reliably when all the following conditions are
satisfied:
The amount of revenue can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the
company;
The costs incurred for the transaction and the costs to complete the transaction can be
measured reliably.
When the outcome of the transaction involving the rendering of services cannot be estimated
reliably, revenue shall be recognised only to the extent of the expenses recognised that are
recoverable.
Revenue is measure at the fair value of the consideration received or receivable and represents
the amounts receivable for services provided in the normal course of business, net of trade
discounts and volume rebates, and value added tax.
Interest is recognised, in profit or loss, using the effective interest rate method.
1.10 Leases
Finance leases
Leases that transfer substantially all the risks and rewards of ownership of the underlying assets of
the company are classified as finance leases. Assets acquired in terms of finance leases are
capitalized at the lower of fair value and the present value of the minimum lease payments at the
inception of the lease, and depreciated over the estimated useful life of the asset. The capital
element of future obligations under the leases is included as a liability in the balance sheet. Lease
payments are allocated using the effective interest rate method to determine the finance lease
cost, which is charged against income over the lease period, and the capital repayment, which
reduces the liability of the lessor.
Assets subject to finance leases in which the risks and rewards of ownership are substantially
transferred to the lessee are treated as receivables and classified as current and non-current,
according to the conditions of the lease. The investment is recorded at the net amount invested
in the leased asset. Adequate provision is made for doubtful debts, which is deductible from the
amount invested.
Operating leases
Leases where the lessor retains the risks and rewards of ownership of the underlying assets are
classified as operating leases.
Payments made under operating leases, where the company is the lessee, are charges against
income on a straight line basis over the period of the lease.
Payments received under operating leases, where the company is the lessor, are recognised as
income on a monthly basis over the period of the lease.
35
Finance leases – lessee
Finance leases are recognised as assets and liabilities in the balance sheet at amounts equal to
the fair value of the leased property or, if lower, the present value of the minimum lease
payments. The corresponding liability to the lessor is included in the balance sheet as a finance
lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is the
interest rate implicit in the lease if possible or else at the entities incremental borrowing rate.
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 of on the remaining balance of the liability.
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.
1.11 Finance income and expenses
Finance income comprises interest income on funds invested, that is recognized in profit or loss.
Interest income is recognised as it accrues, using the effective interest rate method.
Finance expenses comprise interest expense on borrowings that is recognised in profit or loss. All
borrowing costs are recognised in profit or loss using the effective interest rate method.
1.12 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 carried on the balance sheet include cash and bank balances, investments,
receivables, trade creditors, leases and borrowings. The particular recognition methods adopted
are disclosed in the individual policy statements associated with each item.
Impairment of financial assets
At each statement of financial position date the association assesses all financial assets, other
than those at fair value through profit or loss, to determine whether there is objective evidence
that a financial asset or group of financial assets has been impaired.
For amounts due to the association, significant financial difficulties of the debtor, probability that
the debtor will enter bankruptcy and default of payments are all considered indicators of
impairment.
Impairment losses are recognised in profit or loss.
Impairment losses are reversed when an increase in the financial asset’s recoverable amount can
be related objectively to an event occurring after the impairment was recognised, subject to the
restriction that the carrying amount of the financial asset at the date that the impairment is
reversed shall not exceed what the carrying amount would have been had the impairment not
been recognised.
Reversals of impairment losses are recognised in profit or loss except for equity investments
classified as available for sale.
36
Impairment losses are also not subsequently reversed for available-for-sale equity investments
which are held at cost because fair value was not determinable.
Loans from group companies
These financial assets are initially recognised at fair value plus direct transaction costs and include
loans from parent companies, fellow subsidiaries and associates.
Subsequently these loans are measured at amortised cost using the effective interest rate
method, less any impairment loss recognised to reflect irrecoverable amounts. Should it not be
possible to determine the amortised cost, the loans will be reflected at cost.
On loans receivable an impairment loss is recognised in profit or loss when there is objective
evidence that it is impaired. The impairment is measured as the difference between the
investment’s carrying amount and the present value of the estimated future cash flows
discounted at the effective interest rate computed at initial recognition.
Impairment losses are reversed in subsequent periods when an increase in the investment’s
recoverable amount can be related objectively to an event occurring after the impairment was
recognised, subject to the restriction that the carrying amount of the investment at the date of
the impairment is reversed shall not exceed what the amortised cost would have been had the
impairment not been recognised.
Trade and other receivables
Trade receivables and deposits 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. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganization, and default or
delinquency in payments (more that 120 days overdue) are considered indicators that the trade
receivable 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.
The carrying amount of the asset is reduced through the use of an allowance account, and the
amount of the loss is recognised in the income statement within operating expenses. When a
trade receivable is uncollectible, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited against
operating expenses in the income statement.
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.
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.
Offset
Financial assets and liabilities are offset and the net amount reported in the balance sheet only
when the company has a legally enforceable right to set off the recognised amounts and intends
to settle on a net basis or to realize the asset and settle the liability simultaneously.
37
2. Property, plant and equipment
2011
2010
COST ACCUMULATED
DEPRECIATION
CARRYING
VALUE
COST
ACCUMULATED
DEPRECIATION
CARRYING
VALUE
R R R R R R
Computer equipment 350 384 (277 985) 72 399 577 636 (562 729) 14 907
Furniture and fittings 482 121 (309 061) 173 060 541 607 (339 377) 202 230
Leasehold improvements 77 081 (64 834) 12 247 77 081 (61 772) 15 309
Office equipment 66 883 (32 759) 34 124 77 581 (41 397) 36 184
Total 976 469 (684 639) 291 830 1 273 905 (1 005 275) 268 630
Reconciliation of property, plant and equipment – 2011
Opening
Balance
Additions
Disposals
Depreciation
Total
R R R R R
Computer equipment 14 907 84 074 (12 008) (14 574) 72 399
Furniture and fittings 202 230 1 194 - (30 365) 173 060
Leasehold improvements 15 309 - - (3 062) 12 247
Office equipment 36 184 7 798 - (9 858) 34 124
268 630 93 066 (12 008) (57 858) 291 830
Reconciliation of property, plant and equipment – 2010
Opening
Balance
Additions
Depreciation
Total
R R R R
Computer equipment 22 360 - (7 453) 14 907
Furniture and fittings 237 918 1 740 (37 428) 202 230
Leasehold improvements 19 136 - (3 827) 15 309
Office equipment - 42 362 (6 178) 36 184
279 414 44 102 (54 886) 268 630
Pledged as security
2011
R
2010
R
Carrying value of assets pledged as security:
Office equipment 27 138 36 184
Certain assets detailed above are encumbered as disclosed in note 7.
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is
available for inspection
38
Notes to the Annual Financial Statements
3. Intangible assets
2011 2010
COST ACCUMULATED
AMORTISATION
CARRYING
VALUE
COST
ACCUMULATED
AMORTISATION
CARRYING VALUE
R R R R R R
Website costs 69 500 (36 610) 30 890 69 500 (23 167) 46 333
Reconciliation of intangible assets - 2011
2011
OPENING
BALANCE
AMORTISATION TOTAL
R R R
Website costs 46 333 (15 443) 30 890
Reconciliation of intangible assets - 2010
2010
OPENING
BALANCE
AMORTISATION TOTAL
R R R
Website costs 69 500 (23 167) 46 333
4. Current portion of other financial assets
L Sejake
86 513 126 513
The above loan is unsecured and is repayable in equal monthly installments of
R2 000 for a period of up to 86 months (2010 – 98 months).
2011
R
2010
R
Non-current assets
Other financial assets 62 513 117 422
Current assets
Current portion of other financial assets 24 000 9 091
86 513 126 513
5. Trade and other receivables
2011
R
2010
R
Trade receivables 44 803 -
Other receivables 4 017 -
VAT 62 625 35 762
111 445 35 762
As the terms and conditions relating to trade and other receivables fall within industry norms as
well as normal business practice, discounting of trade and other receivables is not applicable.
39
6. Cash and cash equivalents
For the purposes of the cash flow statement, cash resources include cash on hand and in the banks
and investments in money market instruments, net of outstanding bank overdrafts. Cash resources at
the end of the financial year as shown in the cash flow statement can be reconciled to the related
items in the balance sheet as follows:
2011
R
2010
R
Cash on hand 29 47
Bank balances 1 249 913 950 888
Short-term deposits 6 086 663 6 355 777
7 336 605 7 306 712
All cash resources are held with first tier banks and the directors have no reason to believe that the
funds are at risk.
An amount of R77 489.68 (2010 – R77 489.68) included in the Standard Bank of South Africa Limited’s
short term deposits above, has been pledged to Thornhill Office Park Building 5, for premises leased
by the company.
7. Finance lease obligation
2011
R
2010
R
Minimum lease payments due
- Within one year
16 076 14 730
- In second to fifth year inclusive 10 348 26 425
26 424 41 155
Less: future finance charges (1 914) (4 724)
Present value of minimum lease payments 24 510 36 431
Present value of minimum lease payments
due
- Within one year
14 440 12 144
- In second to fifth year inclusive 10 070 24 287
24 510 36 431
- Non-current liabilities
10 070 24 287
- Current liabilities 14 440 12 144
24 510 36 431
The association entered into a lease contract for a PABX system, for which ownership will revert to
the association at the end of the lease term.
The lease term was 3 years and the average effective borrowing rate was 9% (2010 – 9%). As at 31
December 2011 the outstanding liability will be settled within 17 months (2010 – 29 months)
Interest rates are fixed at the contract date. All leases escalate at 10% p.a. and no arrangements
have been entered into for contingent rent.
40
8. Trade and other payables
2011
R
2010
R
Trade payables
99 430 106 167
Accrued audit fees 60 725 89 601
Accrued leave pay 135 383 161 138
Operating lease accrual 13 902 63 868
Payroll accruals 258 071 -
567 511 420 774
As the terms and conditions relating to trade and other payables fall within industry
norms as well as normal business practice, discounting of the trade and other
payables is not applicable.
9. Revenue
2011
R
2010
R
Membership fees 6 719 880 6 180 478
Revenue comprises turnover, which excludes
value-added tax and represents the invoiced
value of goods and services supplied.
10. Operating deficit
Operating deficit for the year is stated after accounting for the
following
2011
R
2010
R
Operating lease charges
Premises
• Contractual Amounts 571 782 605 079
Equipment
• Contractual amounts 206 581 351 967-
778 363 957 046
Loss on sale of property, plant and equipment 12 008 -
Amortisation on intangible assets 15 443 23 167
Depreciation on property, plant and equipment 57 858 78 053
Employee costs 3 523 392 3 475 280-
11. Finance income
Interest revenue
Bank 472 838 405 386
41
12. Finance expenses
2011
R
2010
R
Finance leases 9 065 2269
13. Taxation
No provision has been made for 2011 tax as the association is exempt from income tax in
terms of section 10(1)(d)(iv)(bb) of the Income Tax Act. The association was last assessed
in the 2005 tax year.
14. Auditor’s remuneration
2011
R
2010
R
Audit fees 68 406 89 964
15. Cash used in operations
2011
R
2010
R
Profit before taxation 47 260 (852 950)
Adjustments for:
Depreciation and amortisation 73 301 78 053
Loss on sale of property, plant and equipment 12 008 -
Finance income (472 838) (405 386)
Finance expenses 9 065 2 269
Changes in work capital:
Movement in trade and other receivables (75 683) 149 170
Movement in prepayments (36 642) -
Movement in trade and other payables 146 737 (37 937)
Movement in income received in advance (72 101) 12 275
(368 893) (1 054 506)
16. Commitments
Operating leases – as lessee (expense)
Minimum lease payments due
2011
R
2010
R
- Within one year 447 967 760 530
- In second to fifth year inclusive 89 612 403 164
537 579 1 163 694
Operating lease payments represent rentals payable by the
association for the office premises it operates from, as well as
office equipment leased by the association. No contingent rent
is payable.
42
17. Comparative figures
Certain comparative figures have been reclassified.
18. First-time adoption of International Financial Reporting Standards
The association has adopted the International Financial Reporting
Standard for Small and Medium-sized Entities, for the first time in the
2011 year end. The standard provides certain mandatory and
optional exemptions, all of which have been utilized in the preparation
of these financial statements. Given the fact that the association
previously applied the South African Statement of Generally Accepted
Accounting Practice, there are no itme3s that impacted the opening
balance sheet of the association for the year ending 31 December
2011, and as such not reconciliation is provided.
Similarly, not transitional adjustments are noted for the association.
The date of transition was 1 January 2010.
Detailed Income Statement Notes 2011 2010
R R
Revenue
Membership Fees 6 719 880 6 180 478
Other Income
Bad debts recovered 3 000 -
Finance income 11 472 838 405 386
Sundry income 769 -
476 607 405 386
Operating expenses (refer to page 44) (7 140 162) (7 436 545)
Operating surplus/ (deficit) 10 56 325 (850 681)
Finance Expenses (9 065) (2 269)
Surplus/ (deficit) for the year 47 260 (852 950)
43
Detailed Income Statement Notes 2011 2010
R R
Operating Expenses
Accounting Fees (294 834) (253 968)
Advertising (336 185) (371 455)
Auditors’ remuneration 14 (68 406) (89 964)
Bad debts - (24 625)
Bank Charges (12 673) (25 571)
Cleaning (14 335) (16 407)
Computer expenses (209 869) (191 261)
Conference fees and expenses (12 726) (21 363)
Consulting and professional fees (88 229) -
Delivery expenses (15 665) (14 061)
Depreciation and amortisation (73 301) (78 083)
Draft pricing (259 082) (107 721)
Employee costs (3 523 392) (3 475 280)
Entertainment (1 941) (8 367)
General Expenses (1 504) (5 942)
Gifts (28 295) (24 712)
IFPMA (100 082) (141 350)
Insurance (75 937) (78 701)
Lease rentals (778 363) (957 046)
Legal expenses (188 603) (95 426)
Levies (250) (250)
Loss on disposal property, plant and equipment (12 008) -
Loss on exchange differences (10 264) -
Medical expenses (385) (250)
Meeting expenses (57 641) (58 827)
Printing and stationery (69 365) (36 182)
Record storage (6 328) (3 630)
Repairs and maintenance (26 129) (54 103)
SciTech (27 093) (39 789)
Secretarial fees (21 200) -
Security (6 645) (6 203)
Shows and exhibitions (138 231) (150 445)
Special general meeting (37 224) (53 728)
Staff welfare (38 346) (33 899)
Strategic initiatives (129 853) (397 022)
Subscriptions (162 041) (129 065)
Telephone and fax (95 578) (106 319)
Travel – local (19 612) (12 439)
Travel – overseas (146 008) (198 099)
Update and Briefing (10 500) (71 861)
Workshop expenses (42 039) (103 161)
(7 140 162) (7 436 545)
44
Past Presidents
1967/68 Mr N R Tuck 1994/95 Dr G L Faber
1968/69 Mr A Sachs 1995/96 Mr M C Norris
1969/70 Mr A Sachs 1996/97 Mr M C Norris
1970/71 Mr A L Birchley 1997/98 Mr R de Chastelain
1971/72 Mr A L Birchley 1998/99 Mr R de Chastelain
1972/73 Mr A Sachs 1999/00 Mr R de Chastelain
1973/74 Mr A Sachs 2000/01 Mr R de Chastelain
1974/75 Mr C E Barrelett 2001/02 Mr R de Chastelain
1975/76 Mr C E Barrelett 2002/03 Ms E Mann
Mr A V Trentham Mr R de Chastelain
1976/77 Dr H H Snyckers 2003/04 Presidents council:
1977/78 Dr H H Snyckers Mr M Spector
1978/79 Mr D C Bodley Mr JD Venter
1979/80 Mr D C Bodley Mr A Wish
1980/81 Mr D C Bodley 2004/05 Mr M Spector
1981/82 Mr D C Bodley 2005/06 Dr G Goolab
1982/83 Dr H H Snyckers 2006/07 Mr A Pearce
1983/84 Dr H H Snyckers 2007/08 Mr A Pearce
1984/85 Dr H H Snyckers 2008/09 Mr D Vos
1985/86 Dr H H Snyckers 2009/10 Dr J Louw
1986/87 Dr H H Snyckers 2010/11 Mr A Pearce
1987/88 Mr S P Lance 2011/12 Mr P Bosch
1988/89 Dr H H Snyckers
1989/90 Dr H H Snyckers
1990/91 Dr H H Snyckers
1991/92 Dr H H Snyckers
1992/93 Dr H H Snyckers
1993/94 Dr H H Snyckers
45
Honorary Life
Members
1969 Mr B Wright
1974 Mr A L Birchley
1978 Mr N R Tuck
1979 Mr H C McGarity
Mr S F Janet
1987 Dr R Bauling
Mr F Wayne
1992 Mr D C Bodley
1994 Dr H H Snyckers
1998
Prof J J van Wyk
Mr M Norris
Mr N Dolman
1999
Dr N Kritzinger
Mr J Niehaus
2002
Dr G Faber
Dr J Botha
Prof D Reekie
2008 Ms J van Oudtshoorn
Mr P Smith
Mr R de Chastelain
2009
Ms Maureen Kirkman
46
2011 PIASA Secretariat
Switchboard +27 11 805 5100 [email protected]
Chief Operating Officer Vicki St Quintin +27 11 265 2106 [email protected]
Personal Assistant & Betsie von Wielligh +27 11 265 2101 [email protected]
Office Administrator
Head: Scientific and Kirti Narsai +27 11 265 2107 [email protected]
Regulatory Affairs
Scientific & Regulatory Christine Schoeman +27 11 265 2102 [email protected]
Affairs Co-ordinator
Website:
Physical Address:
Postal Address:
www.piasa.co.za
Thornhill Office Park, Building No 5, 94 Bekker Street,
Vorna Valley, Midrand, 1686
PO Box 12123, Vorna Valley, 1686
47
